1981-05-14

NEW MEMBER

['Order, please. I have the honour to inform the House that the Clerk of the House has received from the chief electoral officer a certificate of the election and return of Gaston Gourde, Esquire, member for the electoral district of Levis.']
Madam Speaker:: Order, please. I have the honour to inform the House that the Clerk of the House has received from the chief electoral officer a certificate of the election and return of Gaston Gourde, Esquire, member for the electoral district of Levis.



[Stage Direction]
Gaston Gourde, Esquire, member for the electoral district of Levis, introduced by Right Hon. P. E. Trudeau and Hon. J. Gilles Lamontagne.


Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, the day before yesterday I brought a motion before this House regarding the injurious effects of high interest rates on the canning industry in Prince Edward County. These same rates have now forced a major Ontario apple packer into receivership and are affecting apple growers in this same county. Perhaps this double blow will bring the government to the realization that the primary resource of Canada, food, is in jeopardy.
I again move, seconded by the hon. member for Northumberland (Mr. Hees):
That the Minister of Finance immediately institute reasonable interest rates for small business, particularly those involved in agriculture.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of the fact the government has now frittered away an entire year of its mandate picking political fights with the provinces and with millions of Canadians over constitutional and energy matters, while allowing the economy of Canada to deteriorate to its worst state since the great depression, I move, under the provisions of Standing Order 43, and seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That the federal government agree to stop-to stop here and now-its antagonistic, unilateral attack on the constitutional rights of the provinces so that an emergency meeting of first ministers might be held immediately to work in a. harmonious spirit seeking co-operative solutions to Canada's grave economic dilemma.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HAZARDOUS SUBSTANCES
Mr. Simon de Jong (Regina East):: Madam Speaker, I rise today under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
Considering that Canadian health officials have known since 1978 of the health hazards, including cancer, miscarriages and birth defects, related to exposure to the fungicide Captan, and considering that Agriculture Canada has ignored the recommendation made by Health and Welfare Canada to ban or severely restrict the use of Captan, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House instruct the Department of Agriculture to issue immediately a strong warning to persons potentially at risk of exposure to Captan, and that this House immediately initiate a full parliamentary inquiry into the use of pesticides in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

May 14, 1981


UREA FORMALDEHYDE-SUPPORT FOR HOME OWNERS' ASSOCIATION-MOTION UNDER S.O. 43
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise under the provisions of Standing Order 43.
Home owners with urea formaldehyde foam insulation in their homes are organizing themselves and holding public meetings because of their concern for their health. Last evening over 400 home owners concerned about this product met in Toronto. The federal government has a responsibility for the health and safety of all Canadians.
I move, therefore, seconded by the hon. member for Cambridge (Mr. Speyer):
That this House instruct the Minister of Health and Welfare, the Minister of Supply and Services, the Minister of Consumer and Corporate Affairs and CMHC to work with the recently formed "Homes With Urea Formaldehyde Foam Insulation Association" in the interests of the health and safety of all Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, in view of the fact that talks have broken down between Canada and the United States on the Pacific coast fishing agreement, I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That the Minister of Fisheries and Oceans inform the United States officials that he is prepared to take action similar to that which he took a year ago on the east coast, that is, to inform fishermen that they can fish without restrictions for Canadian salmon destined to pass through American waters and back to Canadian waters, since it is more proper for Canadians to overfish Canadian stock than it is for Americans to overfish Canadian stock.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Maurice Harquail (Restigouche):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the acts of terrorism
and the number of lives which have been lost in Northern Ireland-over 500 in recent years-and in view of the fact that the situation in Northern Ireland continues unresolved and, indeed, becomes more critical daily, I move, seconded by the hon. member for Welland (Mr. Parent):
That the House request the Secretary General of the United Nations to take appropriate steps immediately to endeavour to mediate a peace settlement in Northern Ireland with the Prime Minister of Great Britain and the government of Northern Ireland.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTH-SOUTH RELATIONS REGULATIONS GOVERNING AID PROJECTS-MOTION UNDER
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. On April 21 before the Standing Committee on External Affairs and National Defence the Secretary of State for External Affairs (Mr. MacGuigan) stated that tied aid is a "minor league issue" and "a red herring", disregarding in the process mounds of evidence from independent researchers, the advice of Liberal foreign policy experts, Maurice Strong and Ivan Head, and the government's own 1975-1980 international development strategy. I move, seconded by the hon. member for Dauphin (Mr. Lewycky):
That this House direct the Government of Canada to adopt immediately the unanimous all-party recommendation of the parliamentary task force on North-South relations "that decisions concerning the procurement of goods and services required for aid projects should be made by the Canadian International Development Agency consistent with development assistance objectives. While a significant portion should be procured in Canada, CIDA should be freed from any fixed percentage rule".


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. Bill Yurko (Edmonton East):: Madam Speaker, under the provisions of Standing Order 43 I seek the unanimous consent of the House to debate an urgent and important matter.
May 14, 1981

One hundred and twenty years ago one of the first missionaries of western Canada, Father Lacombe, founded the St. Albert mission in Alberta. That mission has contributed enormously to western Canada's growth over the years. Today St. Albert is a small city in the suburbs of Edmonton. The very identity of St. Albert is now being threatened by proposed annexation to the city of Edmonton. With a view to preserving a part of the historic character of St. Albert, I move, seconded by the hon. member for Pembina (Mr. Elzinga):
That the government issue a commemorative stamp in honour of St. Albert and its founder, Father Lacombe, to highlight the one hundredth and twentieth anniversary of that town, and that the site where the mission was founded, which is now a provincial historic site, be declared a national monument.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE JUDICIARY
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I rise under the provisions of Standing Order 43. There are at least three federal judicial vacancies in the province of New Brunswick, with another to come up on July 1. One of these positions has been vacant since July 1, 1979. As a result there is a backlog of outstanding judgments of six months or more, and it is taking members of the legal profession over twice the amount of time it should to get files closed.
I therefore move, seconded by the hon. member for Prince George-Bulkley Valley (Mr. McCuish):
That the House instruct the Minister of Justice to get on with the business of his portfolio and make these appointments so that the judicial system in New Brunswick can get back on the track.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ABORIGINAL RIGHTS
Mr. Peter Ittinuar (Nunatsiaq):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The introduction of Bill C-48 has caused enormous anxiety and frustration in the Canadian
north. I therefore move, seconded by the hon. member for Selkirk-Interlake (Mr. Sargeant):
That this House call upon the ministers responsible for Bill C-48 to include provisions in the bill which provide assurance that oil and gas benefits will be an open topic of negotiation until comprehensive claims in the north are settled.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
Mr. Mike Landers (Saint John):: Madam Speaker, I rise on a matter of urgent and pressing necessity. As the latest Gallup poll indicates that 62 per cent of Canadians support the inclusion of a charter of rights in the Constitution, I move, seconded by the hon. member for Sudbury (Mr. Frith):
That this House petition the premiers opposed to the inclusion of a charter of rights to encourage them to commence to represent the view of the majority of Canadians on this important issue.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


IMPORTATION OF MEXICAN OIL-MOTION UNDER S.O. 43
Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. This Liberal government is buying Mexican oil in lumps and chunks at more than double the price of Alberta crude. After using a chain saw to get it out of the barrel-because Canadian drilling rigs are not available having left for the U.S.A.-and adding Alberta crude, eventually the mixture can be refined costing 150 per cent more than the cost of Alberta oil would have been now had the Prime Minister (Mr. Trudeau) accepted the offer made by Premier Lougheed on July 25, 1980. Therefore I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That this House demands that the Minister of Energy, Mines and Resources responsible for this fiasco immediately resign, and the Canadian government wire Premier Lougheed that his offer of July 25, 1980, will now be accepted.


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

May 14, 1981
Oral Questions


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF MAYOR OF MEXICO CITY AND GOVERNOR OF THE FEDERAL DISTRICT OF MEXICO
Madam Speaker:: Order, please. I would like to draw the attention of the House to the presence in our Gallery of Professor Hank Gonzalez, Mayor of Mexico City and Governor of the Federal District of Mexico.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Minister of Finance, who will know that he has achieved another record today. The Bank of Canada rate has been announced and it is up again slightly to a rate which has never before been exceeded in Canadian history. The minister knows, and has sometimes had the frankness to admit in this House, that one of the reasons for the high interest rate is the weakness of the Canadian dollar. He also knows that the single gravest threat to the strength of the Canadian dollar, coming from the policy of his government, is the National Energy Program.
In the interest of solving Canada's economic problems, will the Minister of Finance give us an undertaking now that there will be changes in the National Energy Program of a kind that will strengthen the Canadian dollar and begin to bring interest rates in this country back to a reasonable level?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, without agreeing with all the comments in the preamble to the question, may I assure the Right Hon. Leader of the Opposition today, as I did yesterday in my statement in the House, that it is the intention of the Government of Canada to secure an agreement with the government of Alberta on the question of energy. Discussions to that effect are under way.
The Right Hon. Leader of the Opposition specifically requests that changes be made. I believe my colleague, the Minister of Energy, Mines and Resources, has made it very clear that the Government of Canada is prepared to seek an accommodation, to be flexible; and that requires flexibility on the part of the government of Alberta. I believe, when I
expressed that sentiment, there was considerable agreement in the House yesterday that there is necessity to have an accommodation and a willingness to move on the part of the Government of Canada and on the part of the government of Alberta. That is what I would like to assure the Right Hon. Leader of the Opposition about today.


HOUSING
Charles Joseph Clark: Madam Speaker, one is tempted to ask the Minister of Finance how high he expects the Bank of Canada rate to be before his colleague is prepared to contemplate the kinds of changes which will result in an agreement. But let me come to another area of economic policy.
On Tuesday of this week in the House, the Minister of Finance indicated that he refused to help Canadian farmers and Canadian small businessmen who are now facing bankruptcy. The minister will know that there are some 500,000 Canadian home owners who are holding 1976 mortgages which are likely to come up for renewal this year. Does the Minister of Finance intend to introduce any specific help for these 500,000 Canadians who will be faced with staggering new costs when they renew their 1976 mortgages this year?


Allan Joseph MacEachen: Madam Speaker, I have gone over this ground earlier in the week.


An hon. Member:: Try again. We cannot hear you.


Allan Joseph MacEachen: I would be pleased to repeat for the benefit of the Leader of the Opposition that it is not the intention of the government at the present time to bring in a special new program, which indeed would be very costly.
Yesterday the hon. member for St. John's West made a very vigorous exhortation to me to show expenditure restraint and to reduce the deficit. I have no way of reconciling the desire of the Leader of the Opposition, when he asks me to launch new programs which will be expensive, with the requests of the hon. member for St. John's West to show expenditure restraint in the face of very high inflation. I believe in the long term that it is in the interests of all Canadians, including home owners and farmers, to take the steps now which will bring inflation down. I must say on this point that I tend to agree with the hon. member for St. John's West rather than the Leader of the Opposition.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, the inconsistency of this government is that it is quite prepared to pay high finder's fees to Maurice Strong. It is quite prepared to spend public money on Petrofina; it is quite prepared to spend millions of dollars on

May 14, 1981

advertising indefensible programs. But it will not help Canadian home owners; it will not help Canadian pensioners; it will not help Canadian widows.


Some hon. Members:: Hear, hear!


THE ECONOMY
Charles Joseph Clark: Madam Speaker, I have a question for the Right Hon. Prime Minister. He must be aware that bankruptcies in Quebec have increased by over 20 per cent during the first quarter compared with the same period last year. Can he tell the House whether he is planning to take corrective action immediately to prevent all the other industries in Quebec from going bankrupt following the disastrous economic policy of the Liberal government?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am surprised that the Leader of the Opposition would have chosen this specific day to speak about the disastrous policy of the government as we announced earlier today that a contract was being negotiated by the Bombardier Company in the province of Quebec and Mexico. This is the most important export contract ever negotiated in the industrial sector, and I believe that this fact should be taken into account.


INQUIRY WHETHER GOVERNMENT IS READY TO ANNOUNCE GLOBAL POLICY FOR SMALL BUSINESS
Charles Joseph Clark: Madam Speaker, perhaps the Prime Minister thinks that I can foresee the future. The Prime Minister announced a specific project. I would like to know whether he is now ready to announce a comprehensive policy to help small businessmen in Quebec and in the other Canadian provinces or whether he feels, as does the Minister of Finance, that the problems now facing small Canadian businessmen will not compel the federal government to look for an effective solution.


Pierre Elliott Trudeau: Madam Speaker, as do the Leader of the Opposition and the Minister of Finance, we regret the high inflation rate which affects all Canadians and we believe that this is a disease that we must continue to fight. The Leader of the Opposition has asked for a comprehensive policy. I would like to point out to him that the budgetary measures and the other programs announced by the minister have caused economic growth in Canada, including in Quebec, to reach a rate of 8 per cent in real terms for the last quarter of last year and a rate of between 4 per cent and 6 per cent in real terms for the first quarter of 1981. This is the
Oral Questions
result of an economic policy which aims at creating employment and at promoting growth, which is not the case of the resolution introduced today by the Leader of the Opposition in the House which maintains that there is no growth in the Canadian economy. Madam Speaker, unemployment continues to go down throughout Canada, and particularly in Quebec the number of jobs continues to increase, and this is an economic policy that we are ready to stand by.


CANADA DEVELOPMENT CORPORATION
Hon. John C. Crosbie (St. John's West):: Madam Speaker, the only real growth in this government has been in interest rates, and they have gone up over 7 per cent since the budget came down.
My question is for the Prime Minister. Yesterday the Minister of Finance could not tell us, or would not tell us, whether Mr. Maurice Strong, the ex-Liberal candidate, was being pushed by the government on the Canada Development Corporation. Today the Prime Minister announced that he would like to have Mr. Strong made head of the Canada Development Corporation. He also said that he would like to see the company play a more active role in federal industrial and economic plans, and provide a window on industry. Yesterday the Minister of Finance said there was no change in the role of the Canada Development Corporation. I can tell the Prime Minister this is a blow to investor confidence in Canada and the Canadian dollar will be under severe pressure after this further evidence of neglect of the private sector of this country.
Would the Prime Minister tell the House whether he intends to persist in forcing Mr. Strong upon the Canada Development Corporation, which is only 49 per cent government owned and 51 per cent owned by ordinary shareholders in this country- nearly 30,000 of them? Will the Prime Minister persist in this course and deal another blow to investor confidence in this country?


Pierre Elliott Trudeau: Madam Speaker, there is a small amount of confusion in the question asked by the hon. member. It is not a question of naming the president of the Canada Development Corporation. I think the Minister of Finance made it quite clear yesterday that he had confidence in the president of the CDC. It is a matter of the major shareholder, being the people of Canada represented by the Government of Canada through shares held by the Minister of Finance, wanting to have a say in the appointment of the chairman of the board. This does not seem like an extraordinary innovation. Our government and the preceding government had shown interest in naming chairmen of boards of Crown corporations in which it held all or part of the shares.
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May 14, 1981
Oral Questions
As to the predictions of disaster, no less an authoritative paper than The Globe and Mail this morning described Mr. Strong as a man who has a considerable reputation as a financial wizard.


Some hon. Members:: Oh, oh!


An hon. Member:: Just like the Minister of Finance.


Mr. Andre:: He got a million dollars for doing nothing.


Pierre Elliott Trudeau: I know that reproach is made of Mr. Strong for having at one time been a Liberal candidate. I can understand the frustration of the Conservative party which has no financial wizards in its ranks.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Madam Speaker, Mr. Strong is like the Swiss pimpernel-he picked up a million dollars off the Petrofina deal, given to him by the government. That does not take a financial wizard, that takes an influence pedlar. That is all it takes.


Some hon. Members:: Hear, hear!


QUERY RESPECTING POSSIBLE CHANGES IN POLICY
John Carnell Crosbie: Madam Speaker, there were two prospectuses which went out to the public of Canada, and a selling statement, in which the government made representations that the CDC would operate like a normal commercial corporation to maximize profits in the interests of all shareholders. Now the Prime Minister announces that he wants to change its role to a more active role in federal, that is, politically dictated, industrial and economic plans, and the other shareholders, the public shareholders, are forgotten.
My question to the Prime Minister is this: does Mr. Hamp-son, the president, agree with these efforts to push Mr. Strong on him? Does he agree with this new twisted role of this corporation, which is to be changed from its role that it had in these prospectuses? Does he agree with these matters?
My final question is this: is the Prime Minister prepared to buy out, at prices higher than the prices of several days ago when the shares started to drop in value as the result of reports of these interferences with the company by the government-is he prepared to buy out, at a considerable bonus, all of the innocent Canadian people who invested in this corporation on the government's fraudulent misrepresentations?


Madam Speaker:: Order.


Pierre Elliott Trudeau: Madam Speaker, the former minister of finance is somewhat excessive and incorrect in his various allegations. It is not true that Mr. Maurice Strong made a million dollars in the transaction to which the hon. member refers.


Mr. Blenkarn:: How much did he make, Pierre?


Pierre Elliott Trudeau: If a businessman does make money in a normal transaction, we in this party are not the ones to blame him for it. I am not asking the minister of finance how he made his money before he came into this House, and I do not think it is quite relevant. I am talking of the former minister of finance. I do not think he would welcome any public accusation by anyone about the way in which he made his money.


John Carnell Crosbie: What has that got to do with it?


Pierre Elliott Trudeau: "What has that got to do with it?" he asks. I am just saying that he has no right to make allegations of the kind he has against Mr. Maurice Strong.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The Minister of Finance made it clear in this House that we have no intention of changing the statute governing the Canada Development Corporation. I made it clear when I was asked by the press about this subject yesterday in Calgary that the intention of the government was still to ensure the maximum profits for all the shareholders, including the shareholder which is the Government of Canada. That is still our intention.
We certainly have, as a government and as the major shareholder, a right to expect to be consulted when a chairman of the board is being changed of a corporation in which we are a major shareholder. When the former chairman of the board was appointed some seven or eight years ago, I was involved in that. I was consulted on the person to be appointed from Vancouver. The consultations went on between me and the president, Mr. Hampson.


John Carnell Crosbie: There were not any private shareholders then. There is a considerable difference.


Pierre Elliott Trudeau: Madam Speaker, I think the hon. member has a right to supplementary questions if he wants to ask them.


Madam Speaker:: Order, please.


John Carnell Crosbie: I have a final supplementary, Madam Speaker.


Madam Speaker:: No, I cannot allow-


John Carnell Crosbie: The Prime Minister did not answer it. He has not answered the question, Madam Speaker. The shy, scarlet pimpernel-


Madam Speaker:: I cannot allow the hon. member a further supplementary because his questions were really quite long. Order, please.
May 14, 1981


THE ECONOMY
Mr. Edward Broadbent (Oshawa):: My question concerns today's jump in interest rate levels to a record point, and it is addressed to the Prime Minister.


Mr. Epp:: Bring it down two percentage points, right?


John Edward Broadbent: When the Prime Minister was leader of the opposition, he asked this of the Conservative government of the day and of its high interest rate policy, and I quote:
At what point will the government look at alternatives rather than following the American interest rate up to 13 per cent, 14 per cent and God knows how high.
-said the Prime Minister when he was in opposition.


Arthur Jacob (Jake) Epp: Now we know how high.


John Edward Broadbent: At what point will the Liberal government look at alternatives rather than follow the American rates up to 19 per cent, 20 per cent, and God knows how high?


Pierre Elliott Trudeau: Madam Speaker, the Leader of the New Democratic Party wants to know at what point we will begin to consider this problem. We have considered it, and the Minister of Finance has given his considered answer to this problem.


ACTION TO HELP PEOPLE MOST AFFECTED
John Edward Broadbent: Madam Speaker, the Minister of Finance-


Mr. Hees:: Here goes the love affair!


John Edward Broadbent: The Minister of Finance, being one of the Liberal wizards, has, of course, given non-answers to this question for weeks and months in the House of Commons. I would like to go back to one of the few specifics.


An hon. Member:: Hit him again, George. He is still standing.


John Edward Broadbent: One of the few specific promises the government made when it comes to interest rates, was in its throne speech last year when the government said it would help those "most affected by unacceptably high interest rates". Well, just today at noon, I heard another report from the Minister of Agriculture who was quoted as saying-


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Piggy bank act.


John Edward Broadbent: As bizarre as it may seem coming from a Liberal, the Minister of Agriculture said bank profits are too high, the banks' profits should be reduced, and they should be forced to do something to assist farmers who are having to lose their occupations. Given the Prime Minister's commitment in the throne speech last year to help those most affected by unacceptable interest rates, and given the continuing promises
Oral Questions
provided by a variety of ministers to do something, when is the government going to put up and bring some assistance to the people of this country who need it?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, I did not see the statement by the Minister of Agriculture, but he is a minister who has the concern of farmers at heart, as he should. If he is saying that the banks should show some compassion toward farmers and other small businessmen, I would agree with him.


Some hon. Members:: Hear, hear!


John Edward Broadbent: That was worthy of Madam Pompadour! What expression of sympathy and concern! The people want some legislative action; not pious wishes from the Government of Canada.


HOUSING
John Edward Broadbent: Let me take another concrete area. I asked the minister of housing a question yesterday on behalf of literally thousands of Canadians-and the Leader of the Opposition referred to this today-who own homes and who are forced to abandon them.


An hon. Member:: What do you care about them?


John Edward Broadbent: Considering that there are now 1,000 Canadians each month who have to give up their houses because they cannot renew their mortgages, and considering that CMHC has adopted the brilliant policy of buying up these houses and reselling them at a loss of up to $20,000, will the Prime Minister help a specific group and instruct his minister responsible for housing to provide assistance to those Canadians so they can maintain those homes, instead of aiding the speculators in this country?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I do not know where the Leader of the New Democratic Party got his figures, and I do not know how they compare to other periods. I have heard the minister responsible for housing from the federal point of view, state quite clearly, with factual evidence, that foreclosures had dropped in number and that housing starts-


John Edward Broadbent: There are still a thousand a month.


Pierre Elliott Trudeau: -this month over the same month last year, had increased some 38 per cent. The Leader of the New Democratic Party does not like to admit it, but there is strong growth in the Canadian economy, including the housing sector.

May 14, 1981
Oral Questions
CHAIRMANSHIP OF BOARD OF DIRECTORS


CANADA DEVELOPMENT CORPORATION
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, perhaps I could follow up on the questioning to the Prime Minister, in particular, concerning the recommended appointment of Maurice Strong to the chairmanship of the CDC board. The Prime Minister is reported to have said in Calgary that, as chairman of the Crown corporation, Strong would turn the CDC into a "window on the economic activities of certain sectors with a view to Canadianization".


Harvie Andre: Socialist!


Sinclair McKnight Stevens: Would the Prime Minister indicate if that is a fair reflection of what the Prime Minister said in Calgary or, if he did not say it, does he now confirm to the House that he believes that the CDC should turn itself into a window on the economic activities of certain sectors, with a view to Canadianization? If that is his belief, would he indicate to the House what he plans to do with respect to those minority shareholders who collectively own 51 per cent of CDC and who unwittingly bought into the company, not realizing it was to be his, the emperor's own personal vehicle?


Pierre Elliott Trudeau: Madam Speaker, I am not quite sure what emperor the hon. member is referring to.


John Carnell Crosbie: The Swiss empire.


Pierre Elliott Trudeau: I do not think this is the place to cast aspersions on the monarchy, Madam Speaker, and I am sorry the hon. member is doing that.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: The hon. member asked me if the quote he read is exact. My answer is that it is not, but I did talk about having, and I quote.
-a window on an industry, and we would like to make sure that the CDC has a chairman who will understand and reflect, to a certain degree, the government's priorities.
I went on to indicate what the government's priorities were when 1 said, and I quote, "-the corporation should be run for the benefit of its shareholders, and take into account broad policy objectives of the Government of Canada."
The statute of the CDC makes that quite clear. That is still the government's objective.
I repeat, Madam Speaker, there is nothing untoward about the government, the major shareholder, wanting to have a say in the appointment of the chairman of a Crown corporation-


Sinclair McKnight Stevens: It is not a Crown corporation.


Pierre Elliott Trudeau: -or other corporation in which it has a large interest as a shareholder.


Sinclair McKnight Stevens: Madam Speaker, my question is again to the Prime Minister. Perhaps he could familiarize the House with exactly what did transpire at the board level in CDC. Who suggested that the chairmanship change? As I understand it, two and a half months ago a chairman was appointed. Why is there now a suggestion that Mr. Strong become chairman? Is Mr. Hampson in agreement with this change and, above all, did the suggestion for a new chairman come from the board or from the government side?


Pierre Elliott Trudeau: Madam Speaker, the hon. member must understand that in the past the government has appointed members to the board, and there were members of the board being appointed again for the next annual meeting of the shareholders. It is the government's privilege to suggest-


John Carnell Crosbie: You don't own it. It is not yours-49 per cent is all that you own.


Madam Speaker:: Order, please. The hon. member for St. John's West does not have the floor.


John Carnell Crosbie: Oh, if I have the floor, Madam Speaker, as a supplementary question, does the Prime Minister-


Madam Speaker:: Order, please. I think the hon. member misunderstood me. I said he does not have the floor. The hon. member for Esquimalt-Saanich.


MANPOWER
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, my question is directed to the Prime Minister. Is he in a position to comment on a press report from the Richelieu constituency, according to which the local chairman of the subscription campaign for the federal Liberal party, Mr. Marcel Gauthier, took advantage of the launching of this campaign in early May to announce that 32 projects were being started under the federal summer employment program, which will provide jobs for 121 students in the riding, for a total expenditure of $250,000 in public funds, and in the same breath, without the Minister of Communications and the member for Saint-Hyacinthe-Bagot, who were both present, even batting an eyelid, he said, and I quote:
In return for those jobs-
And I repeat-
-in return for those jobs, those young people should get involved in the party financing campaign.
Will the Prime Minister tolerate such an abuse of public funds for clearly partisan purposes through blackmail, or is he
May 14, 1981

in favour of such pork-barrel practices in the political life of his own province?


Pierre Elliott Trudeau: Madam Speaker, if I remember well the beginning of the question, I was asked whether I was aware of the information provided by the hon. member. The answer is no, but if the member had given me notice of his question I could have inquired, but I will now do so.


Donald W. Munro: Madam Speaker, I have a supplementary question.
Could the Prime Minister tell us, for instance, whether such practices in the Richelieu riding are consistent with the official policy of both the Liberal Party and this government concerning the public financing of political parties, or does he mean to turn away those who are feeding at the public trough?


Pierre Elliott Trudeau: Madam Speaker, if the hon. member would only listen to our replies instead of rehearsing his own questions, he would know that I answered no when he first asked whether I was aware of this situation. Now, I suggest to him that if he wants his questions to be answered, he should follow the well known procedure which is to have his questions listed on the order paper or to give ministers advance notice of them. But apparently, Madam Speaker, the hon. member is more inclined to cast aspersions than to inform the House of a situation.


NORTHERN AFFAIRS
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development. The minister knows that Bill C-48, the oil and gas act affecting the north and offshore, is presently moving through committee. He is partially responsible for that bill. The minister has refused to appear before the committee. This has resulted in a further lack of representation of the people of the north who are most affected by the speed-up of northern development. Will the minister assure this House that he is prepared to appear before the national resources committee on this bill right away and, if he is not prepared to do that, will he tell the House why?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, I would advise the hon. member that I did speak to the chairman about the possibility of appearing. There was some conflict with regard to timing and the adjournment of the House. I am prepared to talk to the chairman again about the possibility of appearing. As the hon. member may know, Madam Speaker, I am leaving for the territories and the Yukon tomorrow and will be gone
Oral Questions
for approximately ten days, but I am quite prepared to talk to the chairman about it at that time.


Ian Gardiner Waddell: Madam Speaker, I gather that the minister will then appear before the committee.


SUGGESTED AMENDMENT OF BILL C-48
Ian Gardiner Waddell: Madam Speaker, let me put my supplementary question to the real minister of the north, as a result of this bill, the Minister of Energy, Mines and Resources. Would the minister agree with me that the whole impact of the Berger and Drury reports is that in order to cope with the social and economic impact of increased northern development, as the minister admitted this morning was going to take place in the north, the Government of Canada must give northerners some share of control of both money and the pace of development? Is the minister prepared specifically, not what he has done already, but specifically, to amend Bill C-48 to give northerners a share in the control of the pace of northern development?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, the minister responsible for exploration and development north of 60 in the territories is still the Minister of Indian Affairs and Northern Development. Bill C-48 provides for this very specifically.

[ Translation]


CANADIAN BROADCASTING CORPORATION
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is for the hon. Secretary of State and Minister of Communications.
As the minister is no doubt aware, the Gaspe peninsula is hardest hit by the strike of Radio-Canada journalists since the TVA network does not yet broadcast in that area. Since the beginning of the strike the people of the region have been without national and international news. Could the Minister use his good offices, and especially his influence with CBC management, in order that journalists of the French language network be offered the same deal as those of the English network of the CBC and which was accepted?


Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, in reply to the first part of the question, I would say that we are of course all aware of the hon. member's interest in having the TVA network extended to the Gaspe peninsula. I do hope that this problem will be solved soon, thanks in large part to the hon. member's representations to the Department of Communications and CBC.

May 14, 1981
Oral Questions
As for the second part of the question, this issue was raised during a press conference by some Radio-Canada journalists who wanted to know if management was prepared to offer French-speaking journalists from Quebec, who have been out on strike for six or seven months now, the same conditions it offered the union of French and English-speaking journalists outside Quebec. CBC has always maintained that not only did it make a comparable offer-
I realize the hon. member opposite is not too interested in the answer but we on this side wish to improve labour relations. The answer briefly, Madam Speaker, is that CBC maintains that its offer is at least identical to if not better than the one made to English speaking journalists and that if it could be shown that the offer made to journalists outside Quebec is better than the one made to Quebec journalists, it would be prepared to offer the same level of pay increase.


HAZARDOUS SUBSTANCES
Hon. David Crombie (Rosedale):: Madam Speaker, in the absence today on other business of the Minister of National Health and Welfare, I will direct my question on a very serious matter to the Minister of Agriculture. The minister will know that on March 31, 1981, the head of the health protection branch of the Department of National Health and Welfare, in an urgent and secret memo indicated that, at least in his opinion, it was essential that the fungicide Captan be banned or severely restricted. It has been reported that the Minister of Agriculture sought, and was successful, in stifling the publication of that report. Is the Minister of Agriculture now willing to make that report public?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I have not told anyone not to make public the report the hon. member mentions. I had some discussions with my officials and they have expressed some reservation about making it public.


Some hon. Members:: Oh, oh!


Eugene Whelan: I have not told anyone not to make it public. I am sure the hon. member knows this product is used in many parts of the world. Many of the fruits and vegetables, especially fruit, brought into this country from the United States and other countries have been subjected to this in an uncontrolled fashion, whereas users of that product in Canada are all licensed.
We have no evidence that it is damaging. They suspect it may be damaging, but there is no real evidence. Testing is being carried out. If my officials bring forward to me a recommendation that it be banned and that the release be
made public, I see no reason to hold it up. However, at the present time there has been no recommendation one way or the other brought to my attention.


REQUEST FOR CONSULTATION WITH MINISTER OF NATIONAL HEALTH AND WELFARE
David Edward Crombie: Madam Speaker, the minister is indeed correct that it is-and this is the hard part- probably the most widely used fungicide in North America. The report sent to the minister from the Minister of National Health and Welfare, which she received from the health protection branch, linked Captan to genetic mutation, cancer, congenital deformities, and foetal abortions. That is why in September, 1978, Sweden banned it. That is why the United States has already indicated to producers that they must show cause as to why it ought not to be banned in the United States. This is a serious matter. I ask the Minister of Agriculture to consult with the Minister of National Health and Welfare immediately and have that report made public so that innocent users are not hurt.


Eugene Whelan: Madam Speaker, the hon. member knows that although our system may not be perfect it is the best in the world. He is creating a fear in the minds of the people. Health and Welfare do not have any real evidence that those countries which have banned it have sound evidence. The hon. member knows that as well as I do. We reacted even when other countries did not with regard to other products we use when we thought they were damaging. Not that much evidence has been brought forward in this instance with regard to Captan. We have given world leadership in banning other products which were not banned in other parts of the world.


David Edward Crombie: Publish the report.


Eugene Whelan: The hon. member says we should ban it. If other countries do not ban it and different varieties of fruit are imported into Canada, it will still be consumed here.


David Edward Crombie: That's a fraud. Publish the report.


Eugene Whelan: For instance, we have a product that we did not allow-


Madam Speaker:: Order.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, my question is to the Minister of Finance who, I notice, has joined the backbenchers on the government side. I wonder if he could return to his seat so that I might ask him a question.


John Carnell Crosbie: He's resigned.
May 14, 1981


William Henry (Bill) Domm: Added to the burden of a likely consumer price increase which threatens to be the highest inflationary consumer price increase on record when it is announced this Friday, to say nothing of skyrocketing costs for everything from mortgage rates to eggs, Canadian families will soon have to shoulder the costs of an added food bill of some $584 million as weigh scales are purchased in order to convert to metric on Januray 1. Will the Minister of Finance, in the interests of the home budget and in the interests of keeping food costs down, consider recommending to cabinet that the move to metric on January 1 be deferred in order that we might avoid this added cost to the food bill of some $584 million which must be borne by the consumers of Canada?


Allan Joseph MacEachen: Madam Speaker, I take note of the hon. member's representation. I would tell him that it is unlikely I would succeed in making this change at this stage. I would remind him, and I can understand his concern about food costs which have risen quite disturbingly over the last year, that one has to take into account as well the rise in incomes that has taken place in Canada.


Some hon. Members:: Oh, oh!


Mr. McDermid:: Tell that one to the farmers.


Allan Joseph MacEachen: If he looks at the situation historically and compares what is happening now to ten years ago and 20 years ago, he will find that the proportion of income made up of food purchases is a decreasing portion of total income. I think that point ought to be made in order not to create hostility toward the food producers of Canada, an important part of our economy.


William Henry (Bill) Domm: The Minister of Finance is well aware that the 100 per cent capital cost allowance for metric scales is useless if (a) there is no profit in the retail business of the food small business sector, and (b), if that is claimed against profits it will represent a half billion dollar loss to the Government of Canada. Has the Minister of Finance allowed in his forecast budget an additional half billion dollars not derived by government but written off by the major foreign multinational companies as they implement weigh scales in the food sector of Canada? Has he allowed for this increase from $14 billion to $14.5 billion in losses by this government by forcing metric, inflationary as it is, on the retail food sector on January 1?


Allan Joseph MacEachen: Madam Speaker, 1 will undertake to examine the hon. member's statistics and get back to him on how it has been dealt with in the projections in the budget.


CORPORATE AFFAIRS
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, my question is for the Minister of Finance. It concerns the
Oral Questions
recent report of the Securities and Exchange Commission of the United States on corporate compensation which shows the salaries of several Canadian corporate executives. It shows, for example, that while Massey-Ferguson was burning and workers were being laid off, the president of Massey-Ferguson managed to fiddle his salary up to $390,591. It shows the president and chief executive officer of Inco managed to almost double his salary to some $513,300.
In light of the fact that these salaries have gone up on average 20 per cent to 30 per cent in one year, when the minister was at the Conference Board last week delivering his homily on the fact that workers are making too much money, did he raise the point that several corporation executives are making more than half a million dollars a year? If not, why not? Second, will he make an effort to close the tax loopholes which allow these corporate executives to take even more money in deferred compensation? Will he do something about that to introduce an element of fairness into our economy?


Allan Joseph MacEachen: Madam Speaker, I will give careful consideration to the representations made by the hon. member. I would remind him for the second time that the allegation made in his question about my comments on workers' incomes is not justified. In fairness, he ought not to continue repeating what is not in fact the truth.


REQUEST FOR AMENDMENT OF CANADA CORPORATIONS ACT
Bob Rae: Madam Speaker, my supplementary question is directed to the Minister of Consumer and Corporate Affairs.
I should like to ask the minister why it is that we have to get this kind of information on what our senior executives are being paid in Canada from the United States, when a simple amendment to the Canada Corporations Act would allow all Canadians to see what kind of just society we live in, and what kind of a mockery it is when the Prime Minister and the Minister of Finance deliver homilies to average workers when their salaries have been following behind increases in the cost of living, and executives are making salaries that are simply obscene in the context of the current difficulties which the average Canadian is facing?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, in my opinion the hon. member's remarks tend to lay emphasis on salaries which would seem much too high. But he knows full well that the matter has nothing whatsoever to do with my department.

May 14, 1981
Oral Questions


MCDONALD ROYAL COMMISSION
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is for the Prime Minister.
In contrast to the practice followed with every other minister or any other elected official who has appeared before the McDonald royal commission, both the commission and the Prime Minister's office appear to have deliberately attempted to conceal that the Prime Minister was requested to testify last July, although apparently very briefly. As national security could not possibly be the reason, why was no public announcement made about his appearance at the time, by either the commission or his own office?


Pierre Elliott Trudeau: Madam Speaker, I cannot answer, of course, for the commission, but there was no deliberate attempt to conceal, as the hon. member states. I was asked informally to appear before the commission, which I did for one afternoon.


SECURITY SERVICE OPERATION
Allan Frederick Lawrence: Madam Speaker, my supplementary question is also directed to the Prime Minister.
An important aspect of the commission's mandate, as he knows, is to ascertain the degree of ministerial knowledge of the operations of the RCMP's security service. I should like to ask the Prime Minister whether he was questioned concerning the authoritative and corroborated evidence, given to the commission early in its existence, that in 1970 when a clandestine security operation was being planned, the Prime Minister stated bluntly that if the circumstances became public he would deny any knowledge of that operation, and was he questioned by the commission as to whether this intention to lie about his knowledge would apply to his testimony before a royal commission?


Pierre Elliott Trudeau: Madam Speaker, I have in every other case, when questions were asked about the work of the commission, referred the questions to the commission itself and indicated that as far as we were concerned we would not comment on testimony; we would wait for the report of the commission. That is still our policy.


INTERNATIONAL TERRORISM
Mr. Irenee Pelletier (Sherbrooke):: Madam Speaker, after the Iranian crisis last January, I asked the Prime Minister whether he intended to bring up the matter of hostage-taking
with his western counterparts when they meet here in Ottawa next July. In light of this new outbreak of international terrorism involving assassination attempts, does the Prime Minister intend not only to bring up the question but to put it on the agenda for the meeting of western leaders planned for next July here in Ottawa?


Pierre Elliott Trudeau: Yes, Madam Speaker. I can assure the hon. member that we do intend to discuss this matter, that is, violence and hostage-taking. We will be doing it in conjunction with the initiative we took in Bonn two years ago. I would intend, on that occasion to ask for a progress report on the matter and, at the same time, bring up the problem of terrorism in the world. I thank the hon. member for having brought the matter to my attention.


BUSINESS OF THE HOUSE
Mr. Baker (Nepean-Carleton):: Madam Speaker, might I ask the government House leader the intentions of the government in respect of the business before the House tomorrow and next week? While he is on his feet, could he designate the appropriate allotted day or days in the coming week for the opposition?


Mr. Pinard:: Madam Speaker, tomorrow we will be resuming debate on second reading of Bill C-61 concerning young offenders, followed by resumption of debate on second reading of Bill C-58, the Canada Elections Act. This will be followed by discussion of Bill S-10, to amend the Corporations and Labour Unions Returns Act. If we have time tomorrow after those three bills we will resume debate at the second reading stage of the Two-price Wheat Act.
There is an agreement among us that if any vote arises tomorrow it would be deferred until next Wednesday. [Translation]
As to the business of the House next week, the Commons will not sit on Monday, pursuant to Standing Order 2(3). On Tuesday we will begin consideration of Bill C-12 concerning bankruptcy and if we complete second reading of that bill before the end of the sitting on Tuesday, or in any event before the end of the sitting Wednesday, we will then take up second reading of Bill C-10, an act respecting Canadian non-profit corporations, and Bill C-l 1, an act relating to the inspection of electric and gas meters and supplies. Those three bills, C-12, C-10 and C-ll are important, they have been on the order paper for quite some time and, as I see it, they do not appear to be overly controversial. That is why I list those three bills for consideration next Tuesday and next Wednesday in the order I gave, that is C-12, C-10 and C-ll. Finally, Thursday and Friday of next week will be opposition days.
May 14, 1981

Business of the House


Walter David Baker: Madam Speaker, it is rather significant that with the economic circumstances as they exist at the moment the government has chosen among its legislative priorities for next week the Bankruptcy Act. I hope the significance of that is not lost.
While the Minister of Agriculture is in the House I would like to refer to a question put by the hon. member for Rosedale in respect of the release of a report that is apparently in the hands of the minister concerning the use, and the effect upon human beings, of the substance captan. It was referred to in the House and there has been a request by members to have that report, prepared at public expense, made available to the public. Would the government House leader undertake to consult with his colleague, the Minister of Agriculture, in order to have that report tabled next week?


Yvon Pinard: Madam Speaker, with respect to the first comment of my colleague, he knows full well that despite its title the bankruptcy legislation is basic statutory amendments which are very significant for both debtors who are in trouble and creditors who need protection. He is not without knowing that this bill has been on the order paper for a very long time and that its study has become urgent.
As to his suggestion that I consult the Minister of Agriculture about the report he has mentioned, I want to assure him that I will do just that within the next few minutes.


Mr. Knowles:: First of all, Madam Speaker, may I confirm that we shall join in the agreement with regard to tomorrow, that if any recorded vote is called for on any measure which comes before the House, any such recorded vote shall be deferred until Wednesday.
I have two questions respecting House business which I should like to put to the government House leader. First, I would draw his attention to the fact that the Parliamentary Secretary to the Acting Minister of Veterans Affairs confirmed yesterday that the acting minister was just about to take to cabinet for approval a resolution respecting veterans which will deal, I trust, with the widows who were left out of last summer's Bill C-40. Could the minister indicate whether that bill will be on the order paper by next week, or certainly no later than the week after? He could do it with the knowledge, I am sure, that the House will take very little time to deal with a bill of that nature.
The other question I should like to put to the government House leader relates to Bill C-53, which is amending legislation respecting sexual assaults and matters of that kind. As he knows, a number of women's organizations in particular are concerned lest this legislation be delayed and not sent to committee during this session. If the government House leader would like to seek some arrangement for a short debate at second reading, we would be glad to enter into that; but at any rate, can he tell us what his thoughts are regarding Bill C-53?


Yvon Pinard: Madam Speaker, I think the answer which was given yesterday to the hon. member by the Parliamentary Secretary to the Acting Minister of Veterans Affairs speaks for itself and is an indication that very shortly we hope the appropriate bill will be put on the order paper. We hope that this will be done as soon as possible, but we will have to await the decision of the cabinet. I take note of the great interest in veterans shown by the hon. member and, as I just mentioned to him, the answer which was provided to him yesterday is a good indication that we also have great interest in their situation and in the situation of their widows.
Concerning Bill C-53, I will talk to the Minister of Justice and hope to be in a position to be more specific next week about his reaction to the request made by the hon. member. If we can agree in a House leaders' meeting to a short debate, we should try to arrange it so that we could proceed on a Friday afternoon some time before the end of June.


Walter David Baker: Madam Speaker, the gist of the last remarks of the hon. gentleman has brought another matter to mind, and that is-and I apologize for rising again-the small business development bond provisions. There have been discussions and questions in the House about the possible extension of that to unincorporated businesses, perhaps including-indeed including-farmers, fishermen and others. The Minister of Finance has indicated that he is prepared to look at that matter.
As a way of assisting the government in expediting its business, I just want to indicate to the hon. gentleman that we would be prepared to discuss the expedition of a debate on that matter. If the government could produce a bill which we might take a look at in advance, I think we could co-operate, and a broader group of Canadians could have the advantage of that kind of bill, as has been requested in the House on a number of occasions. Would my friend look into that?


Yvon Pinard: Madam Speaker, I welcome the generous offer made by the House leader for the Conservative party, and I hope I will be in a position to take advantage of that offer soon.


Stanley Howard Knowles: We make the same offer.


Mr. Towers:: Madam Speaker, some time ago the Minister of State for Small Businesses and Tourism suggested that he might be agreeable to tabling the overview report of the committee which examined metrication in Canada. I wonder if the government House leader could give us an affirmative answer today as to when this report might be tabled in the House.


Yvon Pinard: No, Madam Speaker, I cannot give that firm indication today, but I can tell the hon. member that I will talk to the minister concerned and try to get an answer so that very shortly the hon. member will be more enlightened about this.

May 14, 1981
Business of the House


Mr. Beatty:: Madam Speaker, as the government House leader knows, shortly before the House broke for our brief recess members of the steering committee of the Standing Joint Committee on Regulations and Other Statutory Instruments met with his parliamentary secretary to request an answer from the government as to when it would be responding to the fourth report of the standing committee which was tabled last summer. Can the minister indicate to the House when he will be making that response to the committee and to the House and what action the government is prepared to take?


Yvon Pinard: Madam Speaker, I think the reports in question are interesting and complete. They deserve serious consideration, a fact which I do not deny. However, the hon. member ought to keep in mind the fact that from now until the end of June we have hardly seven weeks left and that during those seven weeks the government must designate twelve opposition days, pursuant to the Standing Orders of the House. In fact we had one yesterday. That leaves eleven. Therefore at the rate of about two opposition days a week the government has barely two or three days left to put its bills through the House and complete this session with the best positive record possible for the well-being of the people of Canada.
In other words, I am saying to the hon. member that the reports in question are important. We do not deny that. But unfortunately the time left at our disposal in the House is too limited for us to devote one day or hours of debate to those reports which warrant debate and explanations and which indeed bear on the structure of the committees of the House. As it happens, I am now working on a draft document for submission to cabinet and I intend to hold consultations concerning a proposal for parliamentary reform in the not too distant future. It will be very difficult to concur in the recommendations of the reports referred to by the hon. member without first considering what we have in mind when it comes to reforming the committees of the House. Consequently we would be putting the cart before the horse if we were to accept those reports before reaching conclusions on the type of parliamentary reform we are prepared to study or consider.
Keeping those two factors in mind, lack of time and the link between the recommendations of those reports and the possibility of a parliamentary reform, I think that the most direct answer I can give the hon. member is that we will be unable to study those reports before the summer recess, but that should not be interpreted as lack of interest on our part. We will take them into account when the time comes to review the changes in the Standing Orders of the House.


PRIVILEGE
Mr. Jim Hawkes (Calgary West):: Madam Speaker, I rise, I hope briefly, on a question of privilege which arises out of the question period. I think one of the most fundamental aspects of the privileges of members of this House relates to our capacity to be free of obstacles in terms of our attendance upon this House. There is also a second principle which guarantees each of us some sense of equality in terms of our recognition. I think those principles flow from the basic understanding of our democracy, which is that it is our responsibility to represent our voters in this chamber, and that responsibility should not be impeded.
On May 27, 1980, the hon. member for Annapolis Valley-Hants (Mr. Nowlan) rose in this House to ask about Your Honour's interpretation of the rights and privileges of members.


Madam Speaker:: Order. The question of privilege should be stated quite early. The hon. member has two or three sentences in which to tell the Chair what the question of privilege is about, I believe the hon. member is referring to valid matters, but what he has to do just now is to tell me immediately what his question of privilege involves.


Frederick James (Jim) Hawkes: Thank you, Madam Speaker; I think I can do so succinctly. On March 24 of this year, at 2.30 in the afternoon, I received a letter from the Secretary of State for External Affairs (Mr. MacGuigan). I rose at that time in question period, and I have risen every day since. That was seven weeks and three days ago. I have been in attendance and risen in this House in every single question period.
As I understand your Honour's interpretation of equal recognition in this House during question period, which flows from your Honour's statement of May 27, 1980, there is a carry-over from day to day. The basic principle is to attempt to recognize, first of all, frontbenchers, and second, those-


Madam Speaker:: recognized quite often. At any rate, we were not sitting for two weeks, so the number would be five weeks instead of seven. However, that does not constitute a question of privilege, because the right of the hon. member to express himself freely is not inhibited in the sense that he is now attempting to expose this matter on a question of privilege.


Frederick James (Jim) Hawkes: Madam Speaker, one short-


Madam Speaker:: No, I cannot hear the hon. member. It is quite clear he does not have a question of privilege. I have said there is no question of privilege, and I cannot hear him further.


Frederick James (Jim) Hawkes: On a point of order, Madam Speaker-


Madam Speaker:: The hon. member for Vancouver-Kings-way (Mr. Waddell).


MR. WADDELL-REPLIES OF MINISTERS DURING QUESTION PERIOD
Ian Gardiner Waddell: Madam Speaker, I rise on a question of privilege which arises from a question I addressed to the Minister of Indian Affairs and Northern Development (Mr. Munro) today. In my submission, a member is entitled not to be misled by a minister, even inadvertently, as perhaps was the case.
Quite simply the facts are these. I asked the minister whether he would appear before the Standing Committee on National Resources and Public Works to testify on Bill C-48. The minister indicated that he would but that he was visiting the north on a ten-day trip. Since that answer was given, I have discovered that the minister is not going on an official trip but on a political trip to open up a political office in Yellowknife.
In a supplementary question which I addressed to the Minister of Energy, Mines and Resources (Mr. Lalonde), he replied that indeed the Minister of Indian Affairs and Northern Development was responsible for this bill in the north. I found out as a member of the steering committee that the committee is going clause by clause-


Madam Speaker:: Order, please. I do not believe the hon. member has a question of privilege. It seems quite clear to me that he is not satisfied with the kinds of answers he has received from two ministers. That might be his opinion, to which he is entitled, but because the hon. member is not satisfied with answers given by ministers does not constitute a question of privilege. If the hon. member is not satisfied with the answers, he can seek other occasions to clarify his queries about actions or intentions of ministers.
___________________________________9581
Order Paper Questions



ROUTINE PROCEEDINGS


[Stage Direction]
Fifth report of Special Committee on North-South Relations-Mr. Breau.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Madam Speaker, the following questions will be answered today: Nos. 1,937, 1,941, 2,043, 2,045, 2,082, 2,236, 2,249, 2,271 and 2,359.
I suggest, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Crosby: 1.	What are the names of the representatives of the Canadian National Railways appointed to the board of directors of CAST Container Lines and to each related company owned or controlled in whole or in part by CAST?
2.	How many board meetings did each representative attend in the year 1980 and in which location was each meeting held?
3.	Are the representatives remunerated for their participation in CAST and related companies and, if so, in what amount?
4.	How many man-hours did each person spend on CAST related business in 1980?
5.	Do CNR investments in CAST or related companies cause a conflict of interest respecting CNR's relations with other shipping lines including Dart Containerline Ltd., Atlantic Container Lines Ltd., Hapag-Lloyd A.G., Trans Freight Lines and Polish Ocean Lines?
6.	Does CNR investment in CAST result in favouritism toward Canadian ports serviced by CNR and CAST, thereby adversely affecting Canadian ports not serviced by CAST like the Port of Halifax?
7.	What is the dollar value of CNR investment in CAST and related companies and what in form does this investment take?
8.	Were the investments taken with full consultation and knowledge of the board of directors of CNR?
9.	What return has CNR realized on such investments for each year that the investments have been held?
10.	Will the government instruct CNR to divest itself of interest in CAST and related companies and, if not, for what reason?
11.	What criteria were used by the government in permitting the investments by CNR and what benefits to the taxpayer are envisioned by the government from such investments?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: The management of Canadian National Railways advises as follows: the question refers to "CAST Container Lines" or "CAST". This is taken as a reference to Eurocanadian Shipholdings Limited (Eurocanadian) and

May 14, 1981
Order Paper Questions
Intercast S.A. (Intercast), and unless indicated otherwise, the answer has been prepared to refer to the two companies as the "CAST Group".
1.	Mr. R. A. Bandeen is Canadian National's representative on the board of directors of Eurocanadian and Intercast.
2.	Although Mr. Bandeen did not attend any board meetings during 1980 of the CAST Group, he did attend three meetings of the executive committee of the board. Board meetings normally are held at the head office of the CAST Group in the Intercast S.A. Building in Fribourg, Switzerland.
3.	The directors are remunerated, but as these are private companies, and as Canadian National is a minority shareholder in the CAST Group, it would be inappropriate for CN to divulge information concerning the amounts of remuneration.
4.	In 1980, Mr. Bandeen spent about seven days on the affairs of the CAST Group, including travelling time.
5.	No.
6.	No.
7.	The book value of Canadian National investments in Intercast is $100,000 in common shares.
The book value of Canadian National investments in
Eurocanadian are:
$11,900,000 in common shares $ 6,225,660 in first preference shares $ 3,533,409 in non-convertible second preference shares $39,854,950 in convertible second preference shares
(The preference shares are to be redeemed not later than
December, 1985. Eurocanadian may decide to redeem them
at an earlier date.)
8.	Yes.
9.	No dividends have been declared to date on the common shares of Intercast as the shareholders have decided that it is preferable to leave the earnings in the company. CN has received, as dividend on its common shares of Eurocanadian, securities previously held by Eurocanadian, which have since been sold for $10,000,073. Dividends have not yet been declared on any of the Eurocanadian preference shares, which issues are less than a year old.
10.	Transport Canada advises as follows: Not at this time. The future of CN's investments in the CAST Group is being kept under review on a semi-annual basis.
11.	The primary initiative for CN to enter or terminate any business arrangement with other companies rests with the board of directors of CN. CN's statute permits the board to take an ownership interest in any business which the directors consider to be incidental to, or in the best interests of, the operation of the railway. Although such decisions may be initiated by CN they must be reviewed by the Canadian Transport Commission, which may hold public hearings, and confirmed or rejected by the governor in council on advice from the commission. The principal current benefits to the Canadian public are the attainment of greater integration of
multimodal transportation services between points in Canada and overseas markets and a financially sound railway company.


Mr. Cossitt: 1.	What is the detailed government employment history of Mr. De Montigny Marchand including positions held, dates involved, etc?
2.	Was there a time during his public service career, within the past 3 years, that he did not work in Canada and specifically was he in Paris and, if so (a) in what capacity (b) for how long (c) what remuneration did he receive during the time involved (d) for what reason was he in Paris (e) who sent him to Paris?
3.	(a) Was he ever employed by the PCO/PMO and, if so, what are all the details of the work he performed (b) does he occupy a position with the Department of External Affairs and, if so, what are all of his qualifications for such a position?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: 1.	1969 Department of Communications
1969 Appointed Director of Research and Co-Secretary of the Telecommission.
1971 Promoted Assistant Deputy Minister (Operations).
1974	Promoted Senior Assistant Deputy Minister (Policy).
1975 Privy Council Office
1975	Promoted Deputy Secretary of the Cabinet (Operations).
1979	On special assignment to Western Europe with base in Paris.
1980 Department of External Affairs
1980	Promoted Associate Under-Secretary of State for External Affairs.
2.	(a) to (e)-See question 1,446, answered October 27, 1980. Debates, page 4108.
3.	(a) and (b)-See part 1 above.


Mr. Cossitt: 1.	With reference to the answer to question No. 1,619, which states in part, that the railway roadbed between Smiths Falls and Brockville which forms part of the Ottawa-Toronto train service, "is adequate for present train operations", what are all the reasons that the government considers the roadbed adequate?
2.	With further reference to the answer which states in part, that the roadbed was built in 1854 and that it takes almost an hour to travel 28 miles, what are all the reasons that the government considers this sufficient facilities to meet present day travel demands?


Robert Theodore Bockstael: 1. The roadbed is considered adequate on the basis that traffic over this line is being carried in a safe and efficient manner. This is supported by a good accident record, in that no reportable accidents due to track or roadbed related causes have occurred in the last five years.
May 14, 1981

Order Paper Questions


[Stage Direction]
2.	The fact that the roadbed was built in 1854 does not, in itself, have great relevance to its condition today. The current condition is determined, for the most part, by the manner and extent of the maintenance performed on it. As stated in paragraph No. 1 above, it is evident that the current condition of the roadbed is adequate for present traffic. The relatively slow service on the route is mainly due to the route's configuration (i.e. the number of curves, crossovers, etc.) rather than the condition of the roadbed. As stated previously in response to question No. 1,619, only ten minutes in time savings could be gained by upgrading the existing track. The need to improve railway passenger services in the corridor area is recognized, however, and VIA is currently reviewing a number of strategies for achieving that objective.
Mr. Cossitt: 1.	With reference to the answer to question No. 1,619 which states in part, that there are no plans to improve the railway roadbed between Smiths Falls and Brockville but that such plans do exist to upgrade the service and facilities on the Smiths Falls to Napanee route, has this line been out of service for approximately two and a half years and what are all the reasons to upgrade it?
2.	Is there a plan to run trains from Ottawa to Toronto through Smiths Falls and direct to Napanee, thus cutting out Ottawa service to Brockville and Kingston and (a) if so, who devised the plan and on what date (b) if not, will the government confirm that the Ottawa-Brockville and through-service westward will continue?


Robert Theodore Bockstael: 1. Even though there is no regular train service on the line between Smiths Falls and Napanee, the line cannot be deemed "out of service". In fact, a maintenance-of-way work crew must ensure that the track is safe for any traffic that it may be necessary to move over it. Any steps to upgrade the service and facilities of this line would be contingent upon the decision on a long-term improvement plan for the Ottawa-Toronto-Montreal corridor.
2.	VIA Rail Canada Inc. is currently developing plans to improve the entire Quebec City to Windsor corridor to be able to run passenger trains at 200 km/h. The plans would include a line between Montreal-Ottawa-Toronto going through or nearby Kingston. The future plans do not contemplate going through Brockville as this is not the most direct route, but envisage the construction of a stretch of new line between Smiths Falls and Kingston and the upgrading of service using present route geometry. These plans are still under development by VIA and have yet to be finalized or presented to the government for a final decision. No long-term government commitment can be made on the future of the Ottawa-Brock-ville service as a decision to continue or discontinue a service in the national railway passenger system is made based on a number of relevant economic and public interest factors e.g. current and projected operating costs and losses, the availability of alternate means of transportation, and the transportation needs of the communities served. A decision on the Ottawa-Brockville service either now or at some time in the future would be made on that basis.


Mr. Blenkarn: 1.	What are the current curfew restrictions at the Toronto International Airport between 11 p.m., and 7 a.m.?
2.	What regular flights are allowed in and out of the airport between 11 p.m. and 7 a.m.?
3.	What special arrangements are made for aircraft that come in on an unscheduled basis during this curfew period?
4.	How many unscheduled flights have there been in and out of the airport since July 1, 1980, and what is a separate schedule of such flights each day?


Robert Theodore Bockstael: 1. Charter flights, cargo flights or technical flight stops using turbo-jet aircraft may not be pre-planned to operate between the hours of 11 p.m. and 7 a.m. local time. Scheduled air carrier flights using turbo-jet aircraft may not be pre-planned to operate between the hours of 12 midnight to 7 a.m. local time. There are two exceptions to this rule by "grandfather rights":
Air Canada flight 472, a DC-9 aircraft departs shortly after midnight and Air Canada flight 561, a DC-8 aircraft which departs approximately 1.30 a.m.
2.	Exemptions to 1. above may, under extenuating circumstances, be granted by the regional administrator, Canadian Air Transportation Administration, or his designated official, the airport general manager, Toronto International Airport. Such requests are evaluated as to the cause of delay, the number of passengers involved, the impact of refusal and the hour of required operation. Extensions to operate between 3 a.m. and 7 a.m. are not granted except in extreme or emergency conditions.
3.	Turbo-jet aircraft, granted an extension of the operating hours, that is, scheduled flights unable to meet normal operating hours by reason of extenuating circumstances, are permitted to depart on runways 23 right, 23 left and 32 only and, except in unusual wind and weather conditions, landing aircraft shall use runways 05 right, 05 left and 14.
4.	During the period July 1 to December 31, 1980, there was a total of 301 rescheduled air carrier flights and 279 rescheduled charter/ferry/cargo flights unable to operate within normal hours and which were authorized to operate during the restricted hours. During the same period, there was a total of 414 movements by corporate (business) jet aircraft during the published restricted hours. The information concerning separate schedules of such flights is not readily available.


Mr. Crosby: 1.	Were ice dams constructed near the port of Montreal and, if so (a) on what date (b) at what cost?
2.	(a) Was the investment in the ice dams approved by Treasury Board and, if so, on what date (b) was it included in the estimates of the Department of Transport and, if so, on what date?
3.	Were any capital costs of the ice dams recovered from cargo assessments or user fees applicable to the port of Montreal and will cost recovery measures be implemented and continued in the future?

May 14, 1981
Order Paper Questions
4.	Were inquiries made to determine whether ice dues are charged to users for icebreaking services in other ports utilized by worldwide marine traffic, particularly ports of the Baltic Sea?
5.	Does the department intend to impose ice dues for icebreaking services on users of the port of Montreal and other ports on the St. Lawrence River?


Robert Theodore Bockstael: 1. No ice dams have been constructed near the Port of Montreal but Transport Canada has constructed ice control works as follows:
(a)	An experimental ice boom was constructed in 1967, articifial islands were constructed in 1967 and 1968, and additional ice booms were constructed in 1969 and 1971.
(b)	Construction costs were:
(i)	$365,000 for the experimental ice boom constructed in 1967.
(ii)	$446,000 for the artificial islands constructed in 1967 and 1968.
(iii) $141,000 for the ice boom constructed in 1969.
(iv) $150,000 for the ice boom constructed in 1971.
Note: The Laprairie Basin ice control structure was constructed by Department of Public Works prior to the winter of 1966/67 in connection with the development of the Expo 67 site.
2.	(a) Under the regulations governing the seeking of
Treasury Board approval some of those projects required approval and some did not. Those requiring approval were approved as follows:
(i)	The experimental ice boom constructed in 1967 received Treasury Board approval on March 23, 1967.
(ii)	The artificial islands were an extension of the experimental ice boom project and an amendment to that submission was approved on August 16, 1967.
(b) The experimental ice boom was included in the Main Estimates for 1967/68.
3.	(a) No capital costs were recovered for these ice control
structures.
(b) The question of dues for Canadian Coast Guard facilities and services is currently being considered by the government.
4.	Yes.
5.	See 3(b) above.


Mr. Blackburn: I. During World War II, were there prisoner of war camps in Canada and, if so (a) how many and, in each case, what was the name and location (b) what was the typical daily diet for the prisoners and what was the cost of the food budget?
2.	Did Canadian personnel guard prisoners of war and, if so, how many were so engaged and were wounded or killed while on duty?
3.	What was the total cost of guarding such prisoners?
4.	Were escapes attempted by such prisoners and, if so, how many were (a) attempted (b) successful?
5.	How many of the (a) German (b) Italian (c) Japanese prisoners of war later returned to Canada and took up residence?


John Leslie Evans: I am informed by the Departments of Employment and Immigration and National Defence as follows: 1. Yes.
(a)	25 prisoner of war (POW) camps including one camp for internees. Name and location of each camp are listed below.
(b)	POWs were on the same ration scale as the Canadian Army. Detail of it is listed below. The cost of the diet is not readily available and to attempt to research this would entail a very costly procedure for which the Department of National Defence does not have the necessary resources.
2.	Yes. As of May 23, 1945, 5,466 members of the Veteran's Guard of Canada, a corps of the Canadian Active Service Force were employed guarding POWs. None were killed or wounded as a result of guarding POWs.
3.	This information is not readily available and to attempt such costing would entail a great deal of research for which the Department of National Defence does not have the necessary resources.
4.	Yes. (a) 600; (b) One.
5.	The information requested was never recorded by the Canada Employment and Immigration Commission and is therefore unavailable.
Camps in which Prisoners of War and Internees Were Held During the Second World War
Camp"L"	Cove Fields, (Quebec City) Que.
Camp "R"	Red Rock, Ont.
Camp "T" '	Three Rivers, Que.
Camp "V"	Valcartier, Que.
Camp 10	Chatham, Ont.
Camp 20	Gravenhurst, Ont.
Camp 21	Espanola, Ont.
Camp 22	Mimico, (New Toronto), Ont.
Camp 30	Bowmanville, Ont.
Camp 31	Kingston (Fort Henry), Ont.
Camp 32	Hull, Que.
Camp 33	Petawawa, Ont.
Camp 40	Farnham, Que.
Camp 41	lie aux Noix, Que. (Internees only)
Camp 42	Sherbrooke (Newington), Que.
Camp 43	Montreal (St. Helen's Island), Que.
Camp 44	Grande Ligne, Que.
Camp 45	Sorel, Que.
Camp 70	Fredericton, N.B.
Camp 100	Neys, Ont.
Camp 101	Angler, Ont.
Camp 130	Kananaskis, Alta and later at Seebe, Alta.
Camp 132	Medicine Hat, Alta.
Camp 133	Ozada, Alta, and later at Lethbridge, Alta.
Camp 135	Wainwright, Alta.
May 14, 1981

Prisoner of War and Internee Menu for the 1st, 1 Ith and 21st Days
Menu	Ingredients	Issue for 100 Prisoners
Breakfast:	Quantity and Unit	
Whole Wheat	4-20 oz. pkgs. cereal, whole	MeatsCereal	wheat	25 lbs. frankfurters2 lbs sugar, gran.	25 lbs. bolognaFresh Milk	25 quarts milk, fresh	Coffee Cake	4 lbs. sugar, gran.	Eggs2 lbs. lard 1 doz. eggs	2 doz. eggs12 oz. milk, skim, dry	Milk1 lb. yeast	25 qts. milk, fresh20 lbs. flour	3 lbs. 6 ozs. milk, skim, dryBread	10 lbs. bread	Margarine	2 lbs. margarine	MargarineCoffee	3 lbs. coffee 3 lbs. sugar, gran.	4 lbs. margarine12 oz. milk, skim, dry	Fats, other 2 lbs. lardDinner:	Sugar, etc.Fresh Fruit	100 servings fresh fruit	17 lbs. sugar, gran.Frankfurters	25 lbs. frankfurters	Mashed Potatoes	50 lbs. potatoes, fresh	CerealsSauerkraut	4 No. 10 cans, sauerkraut	16 lbs. bread, whiteVegetable Salad	5 lbs. greens for salad	60 lbs. bread, rye5 lbs. turnips	20 lbs. flour5 lbs. onions, dry 10 lbs. beets	4-35 oz. pkgs. cereal, whole wheat('{/2 qt. oil, salad)	Vegetables, L.G.Y.('/' qt. vinegar)	35 lbs. salad greensRye bread	30 lbs. bread, rye	Margarine	1 lb. margarine	Bread Pudding	6 lbs. bread	Potatoes2	lbs. raisins 3	lbs. sugar, gran.	100 lbs. potatoes, fresh12 oz. milk, skim, dry	Vegetables, other1 doz. eggs	5 lbs. turnipsCoffee	3 lbs. coffee	5 lbs. onions, dry3 lbs. sugar, gran.	10 lbs. beets12 oz. milk, skim, dry	4 No. 10 cans sauerkrautSupper:	Fruits, otherBologna	25 lbs. bologna	100 serv. fresh fruitBoiled Potatoes	50 lbs. potatoes, fresh	Mixed Green Salad	30 lbs. greens for salad	Fruits, dried('/2 qt. oil, salad)	2 lbs. raisins('/>
qt. vinegar)	7 lbs. prunes, evap.Rye Bread	30 lbs. bread, rye	BeveragesMargarine	1 lb. margarine	7 oz. teaStewed Prunes	7 lbs. prunes, evap.	6 lbs. coffee, R & GTea	7 oz. tea	2V2 lbs. sugar, gran.	Miscellaneous6 oz. milk, skim, dry	1 lb. yeast


Mr. Crosby: 1. Is the Newfoundland Steamship Limited (Company) eligible for a subsidy for a vessel or vessels operating between the port of Montreal and the province of
Order Paper Questions
Newfoundland under Article of Agreement, contract No. 75, between the company and the Canadian Transport Commission?
2.	Would a subsidy under the contract be paid to the company if the vessel or vessels operated from the port of Halifax and, if not, would failure to pay the subsidy discriminate against the port of Halifax?
3.	Are officials of the government, any department, agency or Crown corporation permitted to travel free of charge on vessels of the company under the contract or under any other agreement and, if so, what (a) were the names of any persons who travelled free of charge (b) was the date and time of each trip?


Robert Theodore Bockstael: Transport Canada advises as follows: 1. Yes, but this agreement is now administered by Transport Canada.
2.	No, the subsidy is for a service operated from Montreal to St. John's and Corner Brook.
3.	Yes, in the performance of their duties, (a) and (b) None.


Mr. Halliday: 1.	For each of the past five years for which statistics are available, what was the number of applications of appeal (a) received (b) processed (c) pending decision at the end of the year by the Pension Review Board?
2.	For the same years, what was the number of board members working (a) full time (b) part time?


Hon. J. Gilles Lamontagne (Minister of National Defence):: 1.
Fiscal year	(a) Appeals received	Withdrawn	(b) Processed	(c) Yearly backlog	Comulative backlogPrevious years 1976-77	1,182	-22	587	573	589 1,1621977-78	1,272	-13	868	391	1,5531978-79	1,374	-20	1,085	269	1,8221979-80	1,346	-25	1,110	211	2,0331980-81	1,246	-31	1,292	-77	1,956
2. Members working. See list below.
Fiscal year	Composition	Total1976- 1977	Chairman, deputy chairman and three members	51977- 1978	Chairman, deputy chairman and five members	7
One of the ad hoc members appointed 9-6-77
(10 months)	7
One of the ad hoc members appointed 27-6-77
(9 months)	7
1978-	1979	Chairman,	deputy chairman	and five members	7One of the members retired	10-11-78 (7'/2 months)	6
One of the ad hoc members left on 8-6-78
(2 months)	5
One of the ad hoc members retired on 26-6-78
(3 months)	4
One of the ad hoc members appointed on 10-7-78	5
1979-	1980	Chairman,	deputy chairman	and three members	5
One member appointed 1-8-79	6
One ad hoc member reappointed 10-7-79 to 9-1-80	6
and reappointed 10-1-80 to 31-3-80	6
1980-	1981	Chairman,	deputy chairman	and four members	6
One member retired 17-4-80	5
One member appointed 21 -7-80	6
One ad hoc member reappointed 1-4-80	6
One ad hoc member appointed 2-6-80	7

May 14, 1981
The Economy
[ Translation]


Madam Speaker:: The questions enumerated by the hon. Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.


Henry Perrin Beatty: Madam Speaker, on December 9, 1980, I placed question No. 1,852 on the order paper. It dealt with the chairman of the Canadian Film Development Corporation and the concern as to how regulations relating to conflict of interest apply to him. You will recall that prior to the Easter recess, on April 23, as reported at page 9436 of Hansard, I brought to the attention of the Parliamentary Secretary to the President of the Privy Council the fact that this question remained on the Order Paper unanswered since December 9, and yet the Chairman of the CFDC had furnished the government with information for reply some weeks before. At that time the parliamentary secretary replied as follows:
Madam Speaker, following my conversation with the hon. member this morning, I am checking on the matter. I fail to understand why an answer has not been transmitted through the Privy Council office to be presented in the House. I will do my best to have it as soon as we return from the recess.
Question No. 1,852 is still on the Order Paper unanswered. It has been on the Order Paper for five months now. I would appreciate it if the parliamentary secretary could see to it that the House is furnished with an answer.
[ Translation]


Yvon Pinard: Madam Speaker, I shall take notice of the recommendation made by the hon. member concerning his question. I shall consult the parliamentary secretary and ensure that he can provide the hon. member with an answer as soon as possible. There are undoubtedly very valid reasons to justify this delay, and we shall try to give them to him as soon as I have talked with the parliamentary secretary.



GOVERNMENT ORDERS


Charles Joseph Clark: That this House deplores the record high interest rates imposed on Canadians by the Liberal government which together with double-digit inflation and slow economic growth are causing acute hardship and human suffering for Canadians, and demands that the government immediately introduce a budget and implement other economic programs to address these urgent and pressing problems.
He said: Mr. Speaker, for the past several months we in this Parliament have spent our time debating what amounted to the personal priority of the Prime Minister of Canada (Mr. Trudeau).
In the motion we presented yesterday, and in the motion I am introducing today, we are saying that it is now time for the Parliament of Canada to give attention to the priorities of the people of this nation. Those priorities concern the resolution of our economic and energy problems, but particularly they are a means by which the Government of Canada can come to grips with inflation, unemployment and interest rates, problems which are causing very serious and real, human hardship to individual Canadians across the country.
We use question period and we use days like today, the only instruments available to an opposition, to raise issues. However, all that we can do in opposition is to raise these questions. The government alone has the power to resolve Canada's economic problems. By its actions the government has either made those problems worse, by driving jobs and investment out of Canada, or it has ignored the anger and the sense of betrayal which most Canadians feel about Ottawa's refusal to meet its responsibility of economic leadership.
What concerns Canadians are rising living costs that are making it impossible for the average wage earner to make ends meet; record interest rates that are forcing more and more small businesses and more and more Canadian farmers into bankruptcy; mortgage rates that turn the Canadian dream of owning a home into a financial nightmare; and a lack of economic growth and economic direction that has put a million Canadians out of work today and deeply threatens the job security of thousands more tomorrow.
The individual problems are acute enough, but this Liberal government's greatest crime against Canada now is that it is not even trying to face economic issues. The minister's policy is to do nothing. He says that anything he might do would only make matters worse.
Would it be worse for a pensioner to be getting an energy tax credit today? Would it be worse for a home buyer to be receiving a mortgage tax credit today? Would it be worse for a widow living in her own home to be receiving a property tax credit today? Of course it would not be worse. Those people need help and they need it now. The government's excuse that it cannot afford help for suffering Canadians is utterly false. It is an excuse that is denied by the government's own actions. I say to you, Mr. Speaker, I say to the House and I say to the government that if public money can buy an oil company like Petrofina, public money can protect Canadians against high energy costs and high accommodation costs.
Certainly the issue here is not the principle of spending. This government spends money like water. The question is the priority of spending. This Liberal government would sooner pay approximately a million dollars in a finder's fee to its millionaire friend, Maurice Strong, rather than pay $240 per family for an energy tax credit to low-income Canadians. That is not just raw patronage; that is contempt for Canadians in need.
May 14, 1981


Marc Lalonde: That is a lie.


Charles Joseph Clark: The minister of energy, who might want to put his seat on the line, says that is a lie. He is saying it is a lie that the Government of Canada paid $942,000 to the good Liberal friend, Maurice Strong.


Marc Lalonde: To Maurice Strong, that is a lie.


Charles Joseph Clark: He can check the record, because in his own responses to the House he says it is a lie. His accusation is a matter which we will pursue in the House later on when he will be called upon to withdraw that allegation, defend it or surrender his seat.
In field after field the government is prepared to spend money on the wrong things but ignores the needs of ordinary Canadians who are caught in an economic squeeze. They increase by 17 per cent the amount of public money spent on consultants and on services, and they ignore Canadians who are caught with the prospect of bankruptcy or with high interest rates. They are buying Petrofina at a cost to the average Canadian energy user of $60 a year, yet they refuse to use that kind of tax money to help Canadians who are now facing serious economic problems.
They run a propaganda machine which has the government budget up now by $13.2 million from last year; it now stands at $62.8 million. They are prepared to help sell their own case to the people of Canada, but they are not prepared to make help available to individual Canadians in need. It is not a question of the principle of spending; it is a question of the priority of spending. The government put their own interests first and the interests of the people of Canada last. [Translation]
Mr. Speaker, we are all aware of the disastrous effects our present economic situation is having. The cost of living is increasing by over 12 per cent a year, which is the worst inflation rate we have had for over six years. The average Canadian who borrows is now paying the unprecedented interest rates of 20 per cent on a personal loan and 18 per cent on a mortgage loan. Commercial bankruptcies increased by 17 per cent last year and by over 20 per cent in the first quarter of this year. Farm bankruptcies are increasing at an even greater rate. Housing starts were low last year and will probably not increase much this year. One now needs a family income of $32,000 a year to get a mortgage on a standard house. Also, if we include those who are so discouraged that they do not even bother to register with the unemployment office, there are at least one million jobless in this country. What is even worse is that we are entering an age where technology threatens thousands of workers most of whom do not have the skills required to go from a job that automation made obsolete to another one which resulted from automation.
Bankruptcy for a small business, Mr. Speaker, is not merely a matter of statistics, it affects men and women who devoted
The Economy
their lives and invested their money to build something and who suddenly see their hopes shattered. When a farmer must give up his land because he can no longer meet his bank payments, not only does this constitute a crime against a world hungry for all that we can produce, but it is also a case where a family becomes uprooted and where often a way of life, handed down from generation to generation, based on the love of the land ceases to exist.

When a young couple finds that saving every available cent will not get them a home, or where renewing a mortgage means finding $300 more per month that one does not have, it is not just an economic problem. It means that families who came to this country believing that Canada was a place in which they could get ahead if they were prepared to work begin to question the promise of Canada. If you are a telephone operator, an insurance clerk, an auto worker, or a worker in any other industry where technology and machines are replacing people, you cannot avoid asking yourself if your job is next and, even more troubling, what you will do with work skills society does not seem to need any more. Those are the real economic issues of Canada because they are the issues which directly touch the lives of Canadians. Of course the problems are complex. Governments are elected to resolve complex problems. The minister says, "It is so difficult I will not do anything". If the Minister of Finance (Mr. Mac-Eachen) were Noah, he would say, "I will not build an ark because it is raining too hard".
The minister is protected against the consequences of his do-nothing policy. He is protected by his comfortable minister's salary and by the complacency of being too long in office. The people he was elected to care about are not protected, and the people he used to pretend to care about are not protected.
The government came into office by being against an 18-cent per gallon increase in the cost of gasoline and they have since raised the price 52 cents per gallon. Now the minister says that Canadians should absorb that increase and pay for it out of money he claims they have. Where does the minister think all this loose money is in the budget of the average Canadian family? It is not in their housing budgets with mortgage rates at 18 per cent. It is not in their food budgets with food costs up 15 per cent from a year ago. It will not come out of rising incomes because the government's own statistics show that incomes have been declining in real terms for the last few years.
The only economic policy to come from this government has been to hurt people who need help. The government's major economic initiative has been the national energy policy, which is driving Canadian jobs and Canadian investment out of Canada. Instead of building on energy, the Liberal government is crippling what could be the single strongest growth factor in our economy.
Its other initiative is to blame it all on Bouey, to pretend that the government is not responsible for economic policy, it is just the Bank of Canada. If the minister were more honest, he would admit that he is only taking half the advice of the

May 14, 1981
The Economy
Bank of Canada. He accepts that part of the bank's advice which is hard on people, but he ignores that part of the bank's advice which requires sacrifice by his own government. Governor Bouey has often made it clear that it is very difficult for him to dampen credit demand if the country's largest creditor, the federal government, continues to make massive borrowings to finance its deficits. That is exactly what the minister is doing. Canada's economic situation is the following: we have no Minister of Finance and we have only half of Gerald Bouey. [Translation]
The minister-who, incidentally, has become the invisible man-is faced with two very simple alternatives. He can live up to the economic challenge and start to show the leadership that the nation expects of him, or else he can resign as we asked yesterday. If he stays on as a minister, he must without delay introduce a budget, not in the fall, but before the end of this session. He has held his portfolio for nearly 15 months and he has not yet clearly explained his economic policy to the country.
It is essential that we have a budget, and in this budget the minister must deal with two basic issues. First, he must attack squarely the issue of inflation, especially as concerns the current interest rates, which have reached a record high. If the minister believes that his monetary policy is inadequate, time has come to change it. I say his policy because there is no doubt that, in his capacity as Minister of Finance, he has the last word and the ultimate responsibility regarding monetary issues such as interest rates. He cannot hide behind the Governor of the Bank of Canada.
On the other hand, if the minister believes that his present policy of high interest rates remains the most appropriate for Canada, he must act accordingly and heed the advice of the Bank of Canada, which is to reduce the federal deficit. If he wants to maintain his policy of high interest rates, his budget must provide assistance for the Canadians who are the hardest hit by a double-digit inflation. The minister says that he does not have much room to manoeuvre. We faced the same dilemma when we came to power and inherited the financial mess created by hon. members opposite during the last decade. But we took our responsibilities; we made the hard decisions which were required; the Crosbie budget contained proposals designed to help low and medium income Canadians.
This must become a priority in the Minister's budget. It is about time for him and the government to start saying to Canadians how they expect our economy to develop in the coming decade, and especially how they expect to provide employment opportunities and employment security for Canadians in the eighties.
Mr. Speaker, three great tasks await us if we want to give to Canadians the kind of economic future that this country is capable of. First, we have to produce enough jobs, at least 1.5
million new jobs over the next four years, if we are to make a reasonable dent in the rate of unemployment, if we are to absorb new entrants into the labour force and if we are to provide alternate employment to women and others who are displaced by advanced technology.
Second, we must create the right kind of jobs. We do not need make-work programs which offer marginal pay today and no future tomorrow. We need jobs in the growth industries of the future, the kind of rewarding jobs which excite people and which they know will exist and grow in the years to come. In this country we have the potential to create those kinds of jobs. We have industries, electronics, transportation, northern development, oceanography, as well as energy and food. These are the kinds of industries where we can be among the leaders of the world if we have strong national leadership and effective programs to support our own companies. It is time we began receiving that leadership from this government and seeing those programs emanating from it.
Finally, we must ensure that Canadians who need jobs have the skills and training necessary to qualify for the opportunities we create. We are facing a mammoth problem in that regard. Among our current unemployed we have literally hundreds of thousands of Canadians who simply lack the skills needed to qualify for anything but the most marginal and menial kinds of jobs. The problem will get worse. A recent conference reported that as many as one million women could lose their current jobs during the 1980s to advanced technology. There are estimates that in the auto industry alone as many as 20 per cent of the existing jobs could be lost to automation.
We are dealing with an economic crisis today which was created over the last ten years. This government can do much more for Canadians in need. Its flexibility is limited by the deficits of John Turner, Donald Macdonald and past Fiberal ministers. But just as the lack of economic courage in the past created problems today, the lack of economic courage today will create problems for the future of Canada. The nature of jobs in Canada is changing. Many traditional jobs will no longer exist. Many people now working will see their jobs lost to technology. Much of the training available to Canadians today is looking backward rather than forward. We have to build job security for the future. That must start now, and it can only start with federal leadership.
[ Translation]
When we were in power, we made plans for a conference on economic development in Winnipeg to be held in February of last year. I therefore find it most regrettable that this government should not have shown any real interest in pursuing the matter any further. I deplore the arrogant way in which the Prime Minister has turned down the constructive proposal made by the Premier of Ontario that the first ministers meet to discuss the economic challenges of the nation. A responsible national government would not have missed such a great opportunity of finding a solution in consultation with the provinces.
May 14, 1981

The new budget must come to grips with today's urgent problems, but it must also, and without delay, provide measures capable of guaranteeing Canadians security of employment in the years to come. If nothing is done now, not only will all Canadians suffer but there may also be two specific categories of victims: young people and women. Our young people need new training to be able to tackle the jobs of tomorrow. Women who want to join the labour market or acquire new skills are in need of better opportunities, better orientation and better incentives. We must give priority to jobs which will make it possible for our women, our young people and other Canadians to contemplate with confidence a secure future on the labour market.
We have here, in Canada, the energy, the food and the other resources we need to develop fully. We also have an industrial base which can cope more and more with international competition. Our labour force is young, well trained and dedicated. In spite of their current preoccupations, the uncertainty and the apprehension which they must face today, Canadians still have faith in their country. What they need is leadership and this they expect from their national leaders. They can meet the challenges today if they are assured of a better future. [English]
The government has been ignoring its economic responsibility. It has been driving Canadians into bankruptcy, despair and anger. It has been abandoning its responsibilities to help Canadians prepare for a future which will be profoundly changed but which can be profoundly promising for this country if we have the wisdom and the courage to seize that future. We have been following the Prime Minister's personal priorities for six months now in the House of Commons. It is time to give the priorities of the people of Canada a chance.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: It is time for this government to put aside its preoccupation and to realize that there is a country which wants to build, that there are people who want to be free of the burdens of economic policy placed upon them by this government and that there are individuals who are prepared to go out and work to build a secure future for the country. This must be recognized by the government. The place to start is with a new budget-soon, before the end of June. We must not wait again, ducking behind other elements of policy as was done the last time. We need a new national budget but, most important, we need a new commitment by this government, a commitment which recognizes that the people of Canada have priorities too and that those are priorities which have been ignored. These priorities can no longer be ignored.
Our country was built upon respect for individuals who were prepared to go forward and make a mark for themselves. This government is making that more difficult every day. We live in a country which can become one of the strongest nations in the world if we are prepared to use our resources and take account of the changing world of work. This government must give some kind of leadership. That can come only if there is a
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willingness on the part of the government to put its personal priorities behind and to adopt and confront the priorities of the people of Canada. That is what this motion urges the government to do. We devoutly hope that it will act on that, that it will bring in a budget, that it will begin to pay attention to the problems and to the immense potential of the people of this country.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, before I make my comments on the motion before us I wish to make one observation. We have before us a motion moved by the Leader of the Opposition (Mr. Clark) in the Parliament of Canada which deals with an important subject. I have learned that not only will the Prime Minister (Mr. Trudeau) not be replying, but neither will the Minister of Finance (Mr. Mac-Eachen) involve himself in this debate. I could understand the situation if one or the other was not participating. In most parliaments of the western world, as a normal matter of courtesy if the leader of the opposition or his equivalent was leading off the debate then the prime minister of the country would be there to participate. If that is not possible I would suggest that at the very least it is incumbent upon the Minister of Finance to reply to the Leader of the Opposition on a subject matter which is of profound concern to the people of Canada.


Allan Joseph MacEachen: I spoke yesterday.


John Edward Broadbent: The Minister of Finance says he spoke yesterday.


Allan Joseph MacEachen: It is the same argument.


John Edward Broadbent: Well, the minister should know. The minister is now saying it is the same argument. I listened to the Leader of the Opposition with care. I want to say on behalf of my colleagues that there is much in what the Leader of the Opposition had to say with which we would agree.


Allan Joseph MacEachen: But the hon. member was not here yesterday. Where was the hon. member yesterday?


John Edward Broadbent: Even the Minister of Finance knows that the argument which he has made is absurd. I am exercising my responsibility in speaking today.


Allan Joseph MacEachen: Don't lecture today!


John Edward Broadbent: I am saying through you, Mr. Speaker, to the Minister of Finance, that if the government had any respect for Parliament, and particularly for the people of Canada, it would be responding to today's question, which is the call for a new budget. That is a serious question and it is not responding to it.


Some hon. Members:: Hear, hear!

May 14, 1981
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John Edward Broadbent: However, it reflects the attitude of the government. I do not object to the concerns which the government has had with the Constitution as that is, indeed, an important matter. However, we in this House all know the Prime Minister has shown no interest or concern with the question of economics since he became Prime Minister of this country. That is demonstrated by his response today, and more particularly by the government's over-all response by having neither himself nor the Minister of Finance enter into this important debate.
I now want to turn to the specific subject matter. At the root of the government's lack of policy is its commitment to the perpetuation of a myth which has been established, at this point in the twentieth century, not only in Canada with the present government but also in the United States of America and in Great Britain; that is the myth that in dealing with inflation a government should adopt a policy that forces up the cost of everything we buy and almost everything we consume.
In short, the high interest rate policy which is being pursued by this government is exactly the same in its effects on people as would be an admonition to a drowning man that he would be saved if we only made the water just a bit deeper. That is the kind of economic brilliance this government is displaying in the pursuit of its high interest rate policy.
The experience of Margaret Thatcher in the United Kingdom, or that of President Carter and his successor, President Reagan, in the United States, and the previous experience of Liberal administrations and that of the Leader of the Opposition, ought to have shown this government that rather than curbing inflation or reducing the cost of living, a high interest rate policy does just the opposite.
I want to come back and deal with some proposals. The kinds of suggestions we are making, contrary to what the Minister of Finance has said in his blanket condemnation about opposition suggestions being inflationary, would have quite the opposite effect. 1 hope he changes his mind and participates in this debate soon.
Now that we are in a situation where workers are in their fourth year in a row with a decline in the standard of living, when we are now at almost 12.5 per cent inflation, when just this afternoon we heard that we have set a record in Canadian history for interest rates, I would like to ask, when is it going to end?
The general situation has not been described better than in words which were uttered not long ago in the House of Commons, and I would like to quote them as they relate to the effects of this kind of high interest rate policy, because I think that that is the core of the current problem. It is by no means the whole problem, as I will indicate later. This is what was said just a while ago in the House of Commons:
The present record level of interest rates,.... cuts back the ability of Canadians to buy goods and services of all kinds-cars, homes, food and clothing, everything people need. These high interest rates cut back the ability of factories and businesses generally to expand, to create more production and jobs. These high interest rates limit the ability of business, especially small business, simply to operate at basic non-inflationary levels. Therefore these high interest rates mean losses of production and jobs now and over the coming winter months.
The Conservative government has been saying that these high interest rates are needed to fight inflation, but they in themselves drive up costs and add to inflation. All this has been demonstrated by the jump in the cost of living-
Then of one full point.
-obviously incorporating increases in costs due to increases in interest rates. The government has allowed these increases to go into effect in the period since it has been in office.
These words which, as I say, are quite accurate as a general description of the high interest rate policy and its impact on our kind of economy, were uttered by the present Minister of Industry, Trade and Commerce (Mr. Gray) when he was finance critic for the Liberal party when they were in opposition. The point is that what the minister said when he was in opposition is just as true today as it was in 1979, and just as the high interest rate policy did more harm than good then, it does so now. Just as it was an inappropriate policy when it was pursued by the Conservatives, so, too, is it an inappropriate policy which is being pursued by the Liberals.


Some hon. Members:: Hear, hear!


John Edward Broadbent: I want to ask: When is the message finally going to get home to the government? When is it going to abandon an intellectual commitment to an ossified theory- this absurd preoccupation with monetarism which is now as deeply embedded in the Government of Canada as it is in the government of the United Kingdom and in the government of the United States?
Are we going to wait until the number of families which have to abandon their homes reaches 1,100 a month instead of 1,000? Are we going to wait until a record number of small businessmen have to organize and come to demonstrate on Parliament Hill? Are we going to wait until thousands of additional farmers have to abandon their herds because they cannot meet the interest rate level needed to maintain their existence? Workers have become exasperated with the fact that their living standards have declined three years in a row, so that on the average they have lost $35 a week in real disposable income. Will this loss have to increase to $40 or $50 a week before they must literally organize some riots to force the government to act?
Will the poor finally organize? We just learned, in what I consider to be a very moving and deeply disturbing report not many days ago, that the people who are disproportionately affected by high interest rate charges are the poor. As the people responsible for the study indicated, the poor are more deeply in debt, not because they are buying coloured television sets or taking holidays in Florida or anywhere else, but because they are buying the necessities of life. Are the poor finally going to have to get exasperated, come to Ottawa and force this government to act?
The point is that this MacEachen monetary madness must stop; the people of Canada will have to rise up and force the government to abandon this policy.


Some hon. Members:: Hear, hear!
May 14, 1981


John Edward Broadbent: The motion before the House calls for a new budget, and we agree. The other day and also in the past our financial critic, on behalf of our party, outlined a number of measures which would be appropriate in a new budget, not simply to deal with the question of inflation, but to deal with the long-range structural problem of the Canadian economy which must be dealt with if we are to have full employment.
Today I want to deal with those measures, specifically in the context of dealing with the question of inflation in a serious way. I hope the government will have the honesty today to do what it did not do yesterday in the debate: that is, to reply to the points which are made; not to sit there in arrogant indifference while listening to what is being said on this side of the House, but to take on the arguments. If our arguments are shown to be wrong, we will admit they are wrong. However, we want this serious matter dealt with in a serious way.
Before going to three of four very specific suggestions on how to deal with inflation, I must say that although I have indicated my party agrees with some of the suggestions which the official opposition has made in terms of dealing with inflation, there is one matter on which we frankly cannot accept any criticism from their corner, and that is the interest rate policy itself.
The Leader of the Opposition should know better than anyone else in the House of Commons, perhaps, in spite of his own criticism as Leader of the Opposition before he became prime minister, that when he was in office interest rates not only went up one, two or three times, but more than that. So when it comes to interest rate policy, neither we nor anyone else has to listen to the Conservative Party of Canada. However, I want to put that aside. The Liberal party is the government of the day and it has the responsibility to deal with the important matter before us.
I now want to suggest three or four specific ways of dealing particularly with the pervasive problem of inflation. In so doing, I repeat that I want to see the government put up or shut up today and to respond to the arguments. More than respond to the arguments, I would like to see the government act on them if it agrees with them.
First is the question of interest rates. I have already said that the evidence is overwhelmingly clear to everyone, except someone who gets so rigidly locked into some economic theory that he decides to lock out all the evidence, that the increase in interest rates has not resulted at all in a reduction of the cost of living but has had the opposite effect.
What do we say should be done? We are saying that instead of sitting back and responding in a knee-jerk reaction to what takes place in the United States in terms of interest rates, we should move in the opposite direction. At his regular meetings with the Governor of the Bank of Canada, or by telephone, the Minister of Finance should make it clear that he expects the Bank of Canada to start moving immediately, step by step, in the direction of a reduced interest rate policy in order to bring
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interest rates down to roughly the level of inflation in Canada. We think that would work.
I want to say to the Minister of Finance that if there is a run on the dollar or if there is a concern about a flow of money south of the border in the short run, then certain action could be taken. We do not withdraw from the suggestion of a form of exchange controls. The minister should know better than anyone else that some form of exchange controls has been put in place by many countries in western Europe and by the United States. In fact, the administration of John F. Kennedy in 1963 and that of Richard Nixon in the early 1970s introduced special measures to deal with the problem of the outflow of capital. They showed a little more imagination than has been demonstrated by the Government of Canada. When President Kennedy was in office he introduced for a limited period of time a special tax intended to discourage the outflow of capital. That practice was duplicated almost a decade later by President Nixon.
I say to the Minister of Finance that it is hardly a radical idea and hardly a profound change. Some countries in Europe and also the United States have done this. I repeat, this party does not back away from a little innovation. If we need a limited form of control to deal with a possible export of capital, then the New Democratic Party says, "Let's do it if it benefits the people of Canada".


Some hon. Members:: Hear, hear!


John Edward Broadbent: A second area in which the government could act is in the domain of energy prices, on certain aspects of prices. It could consider seriously the government study done over many years which showed that the oil companies had been ripping off consumers from 1958 to 1973 to the tune of $500 for every man, woman and child in Canada. We all know that this has gone on to an equal or greater degree since.
What is an appropriate response to this? I see the Minister of Finance has been joined by the Minister of Employment and Immigration (Mr. Axworthy) who obstensibly is going to reply. They are sitting there giggling over the situation. 1 should like them to consider the argument again. The argument is that if there is a report which shows that the oil companies have gouged the people of Canada by $500 per citizen over that period of time and which makes recommendations on how to lower energy costs, why would the Liberal government not act if it is concerned about the impact of energy prices on the people of Canada?
In our view, the following suggestions are workable. First of all, by a price reduction of a few cents per gallon the government could order a reduction at the retail outlet level in the price of petroleum to compensate the Canadian consumer for that great loss. I speak not only of the consumer buying gasoline for his or her car but also of the consumer buying fuel to heat his home. A price reduction which was aimed at getting back for the consumer that money which has been gouged from him would make sense and would reduce the cost of living.

May 14, 1981
The Economy
As the study pointed out, one of the major reasons for the excess profits or charges was the multinational structure which enabled Exxon Corporation to overcharge Imperial Oil which, as the price leader in the market in Canada, in turn passed on excess prices to the people of Canada. There is a solution to that problem as well, and that is to do what other countries have done with state-owned oil companies, and that is in our case to make Petro-Canada the exclusive importer. Prices passed on to all retail outlets in Canada could be passed on at a reduced level. I repeat, that is a practical suggestion that would not be inflationary.
Let me deal with one other aspect of energy costs. We now subsidize the price of energy in Atlantic Canada but we do nothing for people who live in our northern regions. People have to pay higher prices in all northern communities across Canada. We recommend that there should be a slight fuel subsidy for northern Canadians in order to bring the price of gasoline and home heating fuel in northern communities across the land down to the average national level. So much for energy prices, Mr. Speaker. I repeat, I do not think that suggestion is inflationary at all; it is non-inflationary and would help reduce the cost of living.
Now I come to high prices. We have said that the government has constitutional authority to act now to establish a fair prices commission to administer key prices in the economy. This is not a revolutionary idea. The Prime Minister misled the House a while ago when he said that the government did not have that authority. That is absurd. It has the same constitutional authority to do in practice what it did when it brought in a wage control program a few years ago. This time we say that it should do something to act on behalf of workers instead of against them.
A fair prices commission would act in a flexible way. It could force reductions where price increases occurred that were unjustified in terms of reasonable profit margins. It would not take action, obviously, against all price increases. Again, this is not an inflationary kind of government response.
My next proposal is a tax reduction to assist average and low-income people. As I suggested in two election campaigns, and as our finance critic mentioned yesterday in the House and before that in previous debates, if this were complemented with serious tax reform that would deal with the banks' excess profits, tax loopholes for the corporate sector and for private individuals, there could be this kind of tax reduction which would help poor people cope with inflation without increasing the debt of Canada at all.
Another item is housing. Of all the countries in the world that ought to have established adequate housing as a right for its people, surely Canada ought to have been doing that a long time ago. Instead of seeing 1,000 families per month having to abandon their houses, we should be seeing 1,000 families moving into new housing. It is only because of the government's inaction in this regard that we do not see housing established as a universal right, like medicare, in Canada.
What would we do? Instead of CMHC buying up houses that people have had to abandon and then selling them at a
loss, we would at least take steps to extend mortgages to enable people to maintain their homes instead of abandoning them. Beyond that, we would say that in a country that produces lumber in the way we do and which still has more than one million workers unemployed, instead of failing to spend the CMHC budget on non-profit and co-op housing, we should deal with the needs of renters in Canada and the needs of people who desire co-op housing by significantly expanding these budgets to ensure that housing is available. That would deal with job creation, and in the not so long run would increase the supply of housing and have the effect of driving down the price of housing as well.
There is something which characterizes these few points I have made. First, in our view they are not inflationary. Second, they would have the effect of reducing costs in a serious, tangible way for ordinary Canadians. Third-and this is the reason I suggest we get no action from the government, from the Liberals and as well from the Conservatives-the kinds of proposals I have advocated here are objectionable not because they are inflationary but because they require, on the one hand, taking action against the banks or oil companies in a tough-minded way, which those two parties do not like to do, or they would require a more activist government in the economy. That really gets at the nub of it.
Whether we talk about a fair prices commission, expansion in the housing sector or the government's having a deepening role in the energy sector, all of these points mean the kind of thing that Francois Mitterand represents in France today, that Helmut Schmidt represents in Germany today, and Olaf Palme will represent when he is returned as prime minister of Sweden in an election that will probably take place next month. They reflect a social democratic philosophy which says that government activity of itself is not evil. I say to the Minister of Finance that it was government activity which moved this country into medicare, took it out of the market system, and did the same earlier with pensions. We are saying in these sectors of the economy that we need a little more government involvement. That is not bad.
I see, Mr. Speaker, you are getting to your feet. I will conclude in one minute. Just as the people of Canada accepted government involvement in pensions and the government establishment of medicare, so too in dealing with a crisis economy the people of Canada would accept the kind of innovative government action I am advocating here today.
If I have the patience of the House, and I see you are getting to your feet, Mr. Speaker, I will conclude with one observation.


The Acting Speaker (Mr. Blaker):: Order, please. I think probably hon. members will accord the Leader of the New Democratic Party the extra moment, but the Chair is in a bit of an awkward position. I have allowed the hon. member to go way past his time. Is there consent for the hon. member for Oshawa (Mr. Broadbent) to continue?


Some hon. Members:: Agreed.
May 14, 1981


John Edward Broadbent: I appreciate the extra time, Mr. Speaker; I will not abuse the courtesy.
I want to conclude with the following observation. When the Conservatives were in power for a brief period of time, the Liberals had a saying about the Conservatives. They said the people of Canada had a non-government. With the deception that has been inflicted upon the people of Canada by the Liberals since they have come back to office, with the Minister of Agriculture (Mr. Whelan) and the Minister of National Health and Welfare (Miss Begin), to name two, promising certain things to the people of Canada and their systematically being denied implementation by the Minister of Finance, we have replaced a "non-government" with what can only be described as a "con government". That is what we have today.
The people of Canada do not want a non-government and certainly do not want a con government. They want an honest and direct government which will deal with their real problems in a way that will be both effective and just. That is precisely what we are proposing.


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Mr. Speaker, I am very pleased to have the opportunity to participate in this debate. I feel badly that the Leader of the New Democratic Party has a sense of outrage that his fresh participation is not being responded to by the Minister of Finance (Mr. MacEachen). I remind him that the Minister of Finance has now spent a full two days in this House dealing with the debate. We are very pleased to welcome the Leader of the New Democratic Party and the Leader of the Opposition (Mr. Clark) to this debate for the first time. We are very pleased to have them here. It is nice to have them drop in on us like this. It is nice to have them show that for 30 minutes or so they are able to take some time out of their travelling arrangements to drop into the House of Commons to discuss this very important topic.
We certainly share many of the concerns that are being raised in the economic questions that are being posed in this debate. The Leader of the Opposition is a little wrong, as he often is, in describing this as the first time this government has come to grips with the economic issue. If he had spent more time in the House or spent a little more time calculating what went on, he would realize that we have spent more time in this session of Parliament debating economic matters than we have matters concerning the Constitution. His own obsession and preoccupation with his losing cause in the Constitution is no reason to judge other people by what he sees in his own reflection. The fact is we have spent a good deal of time and have taken a number of significant and important initiatives in coming to grips with the economic conditions being faced in Canada.
Unlike members opposite, we do not pretend we have the magic solution, the simple panaceas. That is one of the luxuries that can be afforded by the perpetual state of opposition in which hon. ladies and gentlemen opposite find themselves. They do not have to deal with the responsibility of making tough choices and coming to grips with the realities. They can concoct their own realities and develop their own mythology.
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They have become the great myth machine in Canada in trying to describe an economic landscape which simply is not there.
This is why it is important that we have the opportunity to try to clarify what kinds of real conditions do exist and the kinds of initiatives that we in this country are putting forward as ways of responding to them. These are real issues and real solutions, not the fantasy-like island which the Leader of the Opposition has been on for so long. It is not the kind of ideological rigidity of the framework in which the Leader of the New Democratic Party exists, with answers or solutions simply being drawn from age old, traditional orthodoxies upon which they solely exist because any sense of innovation is totally lacking.
I remind the Leader of the Opposition that one mythology he would be very wise to overcome is the feeling on his part that he was defeated a year and a half ago. He was not defeated, he defeated himself.
One of the ironies is that we have a group opposite talking to us about how we should be more realistic in looking at economic figures. They could not even add up the number of members they had in the House of Commons on December 13, a year and a half ago. If they cannot add up to 282, I suggest it places in some doubt their ability to deal with numbers that are a little more complicated and perhaps more complex.
We in Canada have to face the fact that the economic landscape is changing. The terrain we have to traverse is not as it was ten years ago, or even two or three years ago. There are a number of significant economic changes taking place. No one has a clear road map as to what the precise direction must be.
Every country in the industrialized world, in fact every country around the world, is searching for those kinds of solutions. I would hope that we would use this debate for a mutual search for solutions, not for acrimony, not for the kind of adversarial nonsense that we hear, but for a genuine attempt to find what kind of leadership can be given, not just from the government sector but from the private sector as well. Because this is a responsibility shared by all sectors of the economy. This is not something which we can provide for the villains of the piece. It does not fit some morality play. It will require the full involvement and contribution of businessmen, labour people, and government officials at all levels to come to grips with these kinds of questions. That is what we are trying to do, to develop a series of signals that will provide the kind of direction which other major actors and players in this economy can follow.
The first thing we have to understand is that there are parts of the economy that we must assess as being at the present time positive, useful and constructive. The Leader of the Opposition is still reading old speeches. He has not quite been able to update his material yet. He is like an old actor who simply repeats the same old lines.

May 14, 1981
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The fact of the matter is that when he concentrates on matters of employment creation in this country there is no doubt, by every indicator that is available, that the economic performance of this country far surpasses that of any other country in the industrial world. We have created 346,000 jobs in one year. To try to pretend that somehow that fact does not exist, that it is not a fact of life, simply means that the Leader of the Opposition has either forgotten to read or refuses to face reality. In fact, they do the economy of this country a disservice by constantly conjuring up these images of 1.5 million unemployed. The figures speak for themselves. They are there in black and white. The unemployment rate is down to 7 per cent, the best record since 1976. The growth rate of employment is 3.3 per cent, which far surpasses that of the United States, West Germany and Great Britain.
Let us talk for a minute about Great Britain, I have heard members opposite talk with a great deal of pride and admiration about the remarkable economic theories of their counterparts in Great Britain. We have heard the hon. member for York-Peel (Mr. Stevens) talk with great enthusiasm about the magic solutions of Margaret Thatcher. I will tell the House what those magic solutions have created. They have created an unemployment rate of 11 per cent in Great Britain, a full four points higher than we have in this country. If we followed the sort of musings of the Conservative party, the kind of admonition they have raised that we should follow the example of Great Britain, then we would have several hundreds of thousands of additional Canadians out of work. In fact, if we followed the admonitions that were put forward in the Crosbie budget, we would have more Canadians out of work than there are right now.
We were not prepared to adopt the savage-like cuts that would have created an enormous sort of recessionary impulse in this country and put Canadians out of work. We were not prepared to follow the kind of exorbitant and extravagant oil prices which again would have thrown the economy out of kilter and created unemployment for Canadians. The fact of the matter is that we all have to face the reality of rising oil prices, but to bring them in in the kind of cold turkey fashion the member for St. John's West (Mr. Crosbie) prophesied a year and a half ago would have given enormous jolts to the economy of this country, something we were not prepared to accept, which in turn led the Canadian people, in their judgment, to adopt our proposals.
If we look at oil pricing-and this really is one of the major inflationary pushes-we realize that if you increase the price of oil by 100 per cent, that will add almost a full 10 percentage points to the inflation rate. What would have happened if we had followed the Conservative oil pricing policy is that we would have had substantially higher oil prices. In our estimation we would have had an additional 100,000 people out of work.


An hon. Member:: Don't be so stupid.


Lloyd Axworthy: If we were to accept the proposals of the spokespeople on the Conservative side, we know what kind of repercussions would have been created, particularly by their budgetary policies, by the slashing savagery the former President of the Treasury Board was advocating.
While we are on the subject, Mr. Speaker, I know the Leader of the Opposition has a wonderful sort of theory about the community of communities in Canada. He is the great defender of provincial rights in this House. He is the individual who says, let the provinces do it, we do not need an effective national government.


An hon. Member:: He never said that.


Lloyd Axworthy: Let us give more and more to the provincial governments; let us pass over power, let us transfer-


Charles Joseph Clark: A point of order, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: Order, please. I recognize the Right Hon. Leader of the Opposition on a point of order.


Charles Joseph Clark: Mr. Speaker, we can put up with a surfeit of absurdity from the Minister of Employment and Immigration (Mr. Axworthy), but I think even he will realize that he exceeded his own standards in that last comment. He can find nowhere in the record, nowhere in my conduct and nowhere in any of my public activities in Canada any suggestion that I want anything other than a national community in which there is strength at the centre and strength in the parts. The difference between him and me is that I also want to have a country that is united instead of a country as deeply divided as his government's policies have divided this nation.


Lloyd Axworthy: Mr. Speaker, we understand the tolerance for absurdity in the Conservative party as we witnessed at the last convention just how much absurdity they are prepared to accept and continue with.


An hon. Member:: Tell us about your leadership convention.


Lloyd Axworthy: I do not know if the Leader of the Opposition is really serious, but if he looked at the Gallup poll that showed 80 per cent of Canadians felt that the proposals in our constitutional position were adding to the unity of this country, he might do some rethinking about his own absurd positions which he has adopted in this House over the past six months.
I would also like to say to him, Mr. Speaker, this great defender of transferring resources to provincial governments, combined with the kind of position taken by his colleagues in saying that it is this government that is responsible, that he should take one look, if he can spend his time away from his defence of his position amongst his colleagues, at the real facts and figures. He might then realize that over the last year the big spenders in this country, the people who added to the growth of government, were not those at the federal level. We had a 1.5 per cent growth rate of public employees. It was those provincial governments which he defends that added 14
May 14, 1981

per cent to the growth of public employees in Canada. When this government asks for more authority to manage the national economy, it is because we need to provide for a greater degree of control and management of a national scheme so as not to allow that fragmentation, of which he is an advocate, which would permit the economy to get out of shape and out of whack.
I think it is worth talking about some of the positions put forward by the NDP in this area. They talk about their solutions to the problems. Perhaps one of the most inflationary positions we face is that their supply of solutions far exceeds the demand. They are simply out of date on this. They say they are prepared to accept foreign exchange controls. Let us just ask what the result of that might be for a moment. Let us put the case to Canadians as to what the result of a falling dollar and foreign exchange controls might be.
First, there is the whole question of policing. Perhaps the experience the Leader of the New Democratic Party (Mr. Broadbent) might want to examine is that of other countries who have foreign exchange controls and the wide variety of schemes and gimmicks that are used to get around those controls. The fact of the matter is that the primary beneficiaries of foreign exchange controls are the large financial institutions which he does not like. It is the Canadian consumer, the small person, who suffers under exchange controls, because he is the one who does not have the sophistication to find the tools with which they can slice their money.
I think it would be useful for the Leader of the New Democratic Party to examine that particular proposal he is making. I am afraid he would end up hurting the very people he wants to help, and he would hurt them even more by a falling dollar. Because the immediate result of that would not be to cut into the economic growth of this country, because we are already at virtually full capacity; what would happen-


An hon. Member:: We are not at full capacity.


Lloyd Axworthy: What would happen is that we would import inflation to this country. We would import inflation to this country through the kinds of proposals put forward by the Leader of the New Democratic Party.


An hon. Member:: Don't talk such nonsense.


Lloyd Axworthy: If that is the kind of proposal he wants, then l am prepared to-


John Edward Broadbent: I rise on a point of order, Mr. Speaker. The minister, among his continuing series of distortions, even managed to exceed himself by a gross untruth, inadvertent I am sure. He just said we are operating at full capacity. I wonder if he would demonstrate his knowledge of economics by telling us what capacity the Canadian economy is operating at now, and is he defining that as full capacity?


Lloyd Axworthy: The fact of the matter is, Mr. Speaker, that if the Leader of the NDP paid less attention to the response of other people and paid a little more attention to the comments
The Economy
we are making, he would realize that we have had in the past year an employment growth rate of 3.3 per cent, amounting to the creation of 346,000 additional jobs, which far exceeds the record of any other economy in the western world.
If he looks at manufacturing, mining and industrial processing, he will find that we are virtually bumping up against our capacity to produce. One of the real discussions we should be having in this House is with respect to the issue of how to deal with the bottlenecks in our economy. How can we come to grips with the shortages of skilled workers which are developing? How do we deal with capital supply? Again what the Leader of the New Democratic Party forgets, with his peculiar economic theory, is that foreign exchange controls would have a very severe repercussion on the capital flows into this country which are required for investment in new mines, new machinery, new factories and new plants. In other words, his particular nostrum or panacea is restricting growth, imposing higher costs on consumers and developing another way of providing advantages to the very wealthy financial institutions in this country which can move their money around at ease. The small, average Canadian cannot do that. That would be the result of the policies put forward by the Leader of the New Democratic Party.
I think it useful in this economic debate that we talk about some of the proposals we have put forward. I think the Leader of the Opposition referred to the areas of employment and training as being areas where leadership is required. I suggest that that is exactly what we have been providing. While the Leader of the Opposition has been involved in the protection and defence of his own political position, he somehow has not been recognizing what has been put forward as a series of initiatives to deal with employment and training in order to provide workers with greater skills and provide greater opportunities for women and native people to obtain the skills they need.
I would like to take a minute, if I might, to talk about leadership in coming to grips with the structural problems of the labour market and responding to the need for new training. We have just finished signing a series of agreements with major industrial groups in Canada regarding aerospace, shipbuilding, mining, coal mining and construction so as to develop planning arrangements, human resource planning and skill training arrangements to enable us to work in total co-operation and in conjunction with major industrial sectors. This will enable us to have a clear assessment of their human resource needs, so that we can apply new training programs to their needs and introduce affirmative action programs to ensure equality of opportunity for those who have been excluded from the labour force.
We signed one agreement yesterday with the aerospace industry. Tomorrow I will be signing one with the shipbuilding industry. We are making those kinds of agreements in order to come to grips with the very problems identified by the Leader of the Opposition.

May 14, 1981
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We have introduced a new training program for women in non-traditional work. That program has been greeted with a great deal of support. It is now providing the opportunity for women to move into fields such as pipefitting, machinery and welding. These are areas from which women have long been excluded. That is a program that is now being adopted across this country.
We have just introduced a new program to help the physically handicapped obtain their first jobs. That is a $52 million program which the Leader of the Opposition has not come across.
We introduced in the budget of the Minister of Finance the industrial adjustment program, which is an innovative way of dealing with the problems of industrial change and industrial obsolescence. We will now provide direct assistance to workers who are displaced from their jobs because the factories at which they were employed no longer produce products which are needed. That program is now available in five communities and will be available in others. That is one way by which we work together with local businessmen, labour people and provincial government officials to come to grips with the problems of industrial change and adjustment. That again is an example of how we are trying to take a comprehensive and cohesive approach to developing better skills in this country.
We have introduced employment programs which have shifted the resources of this government to help those who have the greatest difficulty in the workplace. We have introduced for the first time an affirmative action program in our own public service to provide leadership in the hiring of women, disabled people and native people in this country. We have worked out a number of new agreements respecting large megaprojects so that they will provide greater assistance to natives to find employment and training opportunities. At the same time we have provided an additional native training assistance program.
For one year I think that is not a bad record. It begins to show that we have put into place a number of new programs. We believe those programs in themselves are not enough, and we must take a still much broader approach to the problem. That is one reason this government recommended the establishment of a parliamentary task force, which will be reporting in a month or so. The task force has spent a full six or seven months crossing Canada, consulting Canadians and coming up with solutions to the very employment and training programs the Leader of the Opposition was so concerned about.
My own department has been working and developing new data analyses and will be coming forward with a statement in a matter of three or four weeks putting forward a number of recommendations which we hope to use in consultation with the provinces and the private sector to provide for a full range of new solutions to the labour market problems of the 1980s.
We believe that one of the most effective ways of dealing with inflation in this country is to tackle the bottlenecks in the economy, to look at where shortages exist and to develop responses which are effective and useful. However, we recognize that solutions cannot be adopted unilaterally. We cannot
conjure up solutions from a magician's hat. We cannot pull answers out of some old Fabian pamphlet the Leader of the New Democratic Party carries around. The answers must be based on up-to-date analyses and arrived at in full consultation with all the partners in the economy. They must be worked out in conjunction with those partners. We must obtain the cooperation of the trade unions with respect to changing practices and providing for greater mobility of workers in Canada so that they will go where the jobs are. We must work out, in co-operation with the industrial companies of this country, new training programs which provide, for the first time, a much higher degree of support in relation to the introduction of on-site industrial training programs. We must work out with the provinces an understanding of how we must change our training allocations, which are decided by provincial governments' in order to develop more up-to-date and relevant training opportunities for Canadians.
I suggest to this House and to Canadians that we are trying to provide real leadership in coming to grips with the structural problems of labour in this country and in providing the initiatives and innovations which will signal to other major actors in the Canadian economy solutions and answers to those kinds of problems. This indicates that we work in partnership and consultation and that we are prepared to work with all sectors of the Canadian economy in finding the solutions which are needed.
We are not here to pretend that somehow the economy of Canada can be changed overnight. It is a very painstaking and at times very difficult process to bring about real reform and change.


Sinclair McKnight Stevens: How long do you need?


Lloyd Axworthy: The fact of the matter is that in the first year we have put the building blocks in place. We have initiated programs. We have initiated the analyses and the consultations which are required. At the same time, I think it is true to our principles and philosophy that we have been prepared to accept and introduce those programs which would provide a cushion and a support for those in the economy who are hurt by inflation and who are sometimes the losers when other incomes go up. I remind hon. members that ours is one of the few countries in the industrial world which has an indexing of the income tax system. That program costs the treasury substantial amounts of money. It is very easy to point to the United States as an example, but the United States does not have the income tax index we do in this country. That provides a major degree of support for those Canadian consumers about whom we have heard so much. It provides us with the ability to keep taxes in line with incomes on an inflationary basis. I suggest that that is a very important support for the Canadian consumer.
We have also introduced supports in the area of helping older people through income supplement programs. That is a very necessary support for those who do not have incomes which rise as fast as the incomes of those who have unions
May 14, 1981

working for them or those who are organized and have full wage opportunities.
We have provided for a degree of support in other areas in the economy. Individuals are being cushioned. Canada Mortgage and Housing Corporation provides a non-profit housing program which is prepared to provide rental housing at interest rates of no more than 1 per cent or 2 per cent at the present moment. If hon. members do not think the minister responsible for housing is not crying about the fact that he cannot do more, he is, but that is a program which is one of the major suppliers of rental housing across Canada. The federal government is putting up capital to supply housing, whereas many of our provincial counterparts simply will not introduce comparable housing programs.
At the same time the Minister of Consumer and Corporate Affairs (Mr. Ouellet) has introduced programs to deal with price-fixing. He has examined the oil industry. He is providing answers. The Minister of State for Science and Technology (Mr. Roberts) has introduced major programs to increase research spending in this country up to 22 per cent. The Minister of National Health and Welfare (Miss Begin) has been able to obtain major advantages for medical research in this country. The Minister of Industry, Trade and Commerce (Mr. Gray) has provided for additional funding through DIP and other means in order to increase productivity.
Over the past year we have been trying to redress some of the serious and grievous errors made by the previous government, a government which cancelled all employment programs, a government which took no initiatives in training or in providing ability to develop new ideas and innovations. On the other hand, we have been trying to do this in the very real recognition that we have fiscal restraint. But we cannot go whole hog, as the Leader of the New Democratic Party wants us to do. We have to provide a balance between what we can spend and what we must do in terms of maintaining some hedge against inflation.
No one on this side has ever tried to say that what we are doing is absolutely perfect at all times. But we are making a good and effective effort. If members of this House would support the Minister of Finance in the kinds of proposals he is putting forward which are designed to cut into that inflationary cycle, to provide the bite for the kinds of cost increases we have, to provide for the kinds of incentives needed to gain the co-operation of the business community and to get the unions to start restraining their own demands, then I think we can begin to beat inflation in Canada.
The Economy



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: 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 Simcoe North (Mr. Lewis)-Housing-Position of home owners; the hon. member for Winnipeg- Assiniboine (Mr.	McKenzie)-Veterans
Affairs-(1) Request for allocation of additional funds. (2) Preparation of amending legislation; and the hon. member for Burnaby (Mr. Robinson)-Royal Canadian Mounted Police- Query respecting legislation and collective bargaining rights.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of the Leader of the Opposition (Mr. Clark):
That this House deplores the record high interest rates imposed on Canadians by the Liberal government which together with double-digit inflation and slow economic growth are causing acute hardship and human suffering for Canadians, and demands that the government immediately introduce a budget and implement other economic programs to address these urgent and pressing problems.
Sinclair McKnight Stevens: Mr. Speaker, I am sorry that the Minister of Finance (Mr. MacEachen) has chosen at this time to vacate the House. I was going to mention it was rather fortunate that three ministers of the Crown were here who I felt hold a tremendous responsibility for the plight in which we Canadians find ourselves. I refer, of course, to the emperor's triumverate. We have the 20 per cent kid, sometimes referred to as the Minister of Finance, who has decided to leave; we have Dr. Doolittle, sometimes referred to as the Minister of Industry, Trade and Commerce (Mr. Gray); and then we have old ironclad himself, sometimes referred to as the Minister of Energy, Mines and Resources (Mr. Lalonde). I hope that the 20 per cent kid will, in due course, read my remarks and take to heart some of the things I am going to say.
I rise to participate in this debate at a time when our inflation level is approaching 14 per cent, when we have a prime interest rate of approximately 20 per cent, and when our dollar is literally limp in relation to the American dollar. I find it most strange that we have such a complacent, rather indifferent attitude on the part of the government to the problems which this nation is facing. In fact, it is worse than that. It is

May 14, 1981
The Economy
not just indifferent, it is a tendency to want to distort the facts, to mislead the public into thinking that what is in fact true today is somehow not the way it appears. Surely Mr. Speaker, you will recall only yesterday when the 20 per cent kid rose to speak on this subject, and as reported at page 9551 of Hansard said:
I am not ready to engage in a debate about the historic causes of inflation in this country.
Frankly, I do not blame the Minister of Finance for not wanting to get into that debate because I know he would agree how damning it is of his government's own record. Having said that, the minister went on to say the following, talking about governments:
-especially in the early part of the seventies, were strongly pursuing expansionary policies and adding to their deficits, the public and all political parties generally supported that type of fiscal policy.
I was not here before 1972 but I have been in this House since 1972. I find it astounding that a minister of the Crown would stand up and mislead everyone, not only this House but the Canadian public, by suggesting that the deficit financing which Liberal governments engaged in during the 1970s was agreed to by all parties, because that is just not true. For four of those years I was financial spokesperson for the official opposition. I can tell you, Mr. Speaker, and I know you will agree, that I repeatedly, on behalf of my party, pleaded with the government to come to its senses, to cut back on its spending and reduce its deficit. I did that because the country was falling into a pattern which was going to produce the same inflationary atmosphere in which we are now living.
It is one thing for the government to have made mistakes in the past, to have led us into the bewildering situation that we have today; but for the government now to be trying to create the impression that we did it all together, that we all agreed to the type of economic approach which has led to the present inflationary pressures, is totally untrue. It is not worthy of the Minister of Finance and I would ask him to withdraw that type of comment.
One might say that three years ago it was all right for the government to say, "Let us try this thing called gradualism which has been recommended by our officials. Let us try this process where we are told that if we allow interest rates to rise, somehow or another that will eventually dampen the economy and lower inflation." I can understand the government of the day accepting that kind of thinking. But at some point, surely, we have to ask when the experiment will end.
We should also conclude that if the remedy is wrong then it must be corrected. For example, in April, 1978, the chartered bank prime rate was 8.5 per cent. In fact, it had ranged from the 6.75 per cent to the 8.5 per cent level through November, 1970, to April, 1978. In short, we never had the type of interest rate structure during that period with which we are now living. In fact, right up to May, 1978, the rate was still 8.75 per cent. On May 30 it rose to 9 per cent.
Since May, 1978, under the inspiration of the present government, the prime rates of our chartered banks have risen from 8.75 per cent to the present 19.5 per cent. They have
more than doubled. One would have thought that if the spirit or the theory behind gradualism and rising interest rates was to work and curb inflation, we would now be seeing the fruits of it. But we find that inflation in 1977, judged by the CPI, was 8 per cent; in 1978 it was 9 per cent; in 1979 it was 9.1 per cent; in 1980 it was 11.2 per cent; and currently it is running at 13.9 per cent on the minister's own admission. At least, that has been the rate since he brought in his last budget. Notwithstanding the interest rate explosion of rates doubling in that period, we also have an inflation level which has risen more than 50 per cent during the same period.
Can the government not come to its senses? Can it not at least step back and say, "We have become the mad scientists who have put forth a theory which obviously is not working; we must adjust our theory"? In short, economists from coast to coast are now saying that there is a better way, that there should be credit controls or that some type of more direct approach to the entire financial economic system is needed as opposed to this rather arbitrary, "Let's have higher rates of interest in the hope that they will cool out inflation".
The reason I emphasize this is that I feel we in the House somehow become removed from the reality of what we are talking about. It is easy to talk about 10 per cent or 15 per cent per annum inflation, or, as Dr. Campbell of Wood Gundy Limited said, that we are heading for 20 per cent if the government does not come to its senses as far as inflation is concerned. But the reality for the average home owner or average consumer who must shop for groceries is very much more vivid.
Since 1970 I have kept a record of the cost of what we call a shopping basket in my riding which contains 15 different items one might buy when shopping on the week end at a local store. This record is telling of the hardships being inflicted upon the Canadian public. I would like to review how those items have soared in price due to government policy or lack of policy concerning inflation. For example, in November, 1970 the 15 items had a total cost of $9.97. That is what it cost a consumer to buy a 15-ounce package of Special K, a three-quart jug of 2 per cent milk, a one-pound sirloin steak, a dozen grade A eggs, a pound of Maxwell House coffee, two 19-ounce tins of Libby's pork and beans, two ten-ounce tins of Campbell's tomato soup, ten pounds of white sugar, six ten-ounce tins of coke, a 48-ounce tin of Mitchell apple juice, a pound of centre cut pork chops, a pound of centre cut ham, eight eight-ounce slices of Kraft Canadian cheese, a 12-ounce jar of Billy Bee honey, and a one-pound package of chicken breasts.
If one goes down to the local store to buy those same articles-and some of them are now expressed in metric, to make it more confusing-they will cost today $34.65. This is a jump of 247 per cent since November, 1970. Faced with that, surely the government of the day must accept the responsibility for this crisis. It is time that it quit playing political games. It is time for Dr. Doolittle over there to do something to help the poor, downtrodden Canadian who is overtaxed and over
May 14, 1981

regulated, rather than pompously saying, "I am the Minister of Industry, Trade and Commerce; I am a man of great authority".
I have touched upon the cost of those items, but we must realize that a 15-ounce package of Special K which cost 56 cents in November, 1970, now costs $1.99, thanks to the policies of the government; a three-quart jug of 2 per cent milk which then cost 67 cents, thanks to the emperor who has ruled the country for 12 years now costs $2.97.


Marc Lalonde: Respect the monarchy.


Sinclair McKnight Stevens: Mr. Speaker, do you see how pompous these ministers are? They feel that I have referred disrespectfully to their leader, the emperor, in the House of Commons. I take it they want me to pay tribute.


John Leslie Evans: Mr. Speaker, I rise on a point of order. The general rule in this House, which has been well-established, is that hon. members should refer to members of the House as hon. members or hon. ministers. The hon. member for York-Peel (Mr. Stevens) has a tendency to make very derogatory comments about other hon. members. It is clear in the rules that this is unacceptable. I ask that the hon. member be requested to withdraw and mend his ways.


Mr. Kempling:: That is not a point of order.


The Acting Speaker (Mr. Taylor):: The point of order is within the rules and I would ask the hon. member to refer to members in the proper way.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, certainly I appreciate your intervention and the fact that you agree; I have referred to the various members in the proper way.


An hon. Member:: That is not what he ruled.


Sinclair McKnight Stevens: I was referring to the cost of some of these items. For example, a pound of sirloin steak which could have been bought for 99 cents in November, 1970, now costs $4.69 at the local A & P store; a dozen eggs, which were 42 cents then, are now $1.26; a pound of Maxwell House coffee which was then $1.19 is now $4.08; Libby's pork and beans which were then 54 cents are now $1.94; two tins of Campbell's soup which were then 24 cents are now 84 cents; ten pounds of sugar which were then 96 cents are now $4.07. I could cite each item, but the point I am trying to make is that these are not simply statistics on this rather misunderstood inflation which is up to 13.9 per cent on an annualized basis. It is the reality with which housewives are faced when they go to stores to buy these necessities every weekend.


Mr. Peterson:: What about househusbands?


Sinclair McKnight Stevens: I remind hon. members what we are debating. It is a resolution of my leader which reads as follows:
The Economy
That this House deplores the record high interest rates imposed on Canadians by the Liberal government which together with double-digit inflation and slow economic growth are causing acute hardship and human suffering for Canadians-
Today we are debating what we really believe, that the inflationary spiral, the spiral of rising interest rates and the lack of real growth in the country, do not have to continue. If the government does not change its ways, if it does not do something effective, the prices of those commodities will continue to rise. I should like to refer to what the prices of those commodities will be in 1985. I have not gone back and then ahead ten years; I have simply taken a look at what will be the prices of these various commodities four years down the road if the government does not get a handle on inflation soon. We will find in 1985 that a three-quart jug of 2 per cent milk will be selling for $6.53.


James Scott (Jim) Peterson: Tell us about Billy Bee honey.


Sinclair McKnight Stevens: It sold for 67 cents in 1970 and it will be selling for $6.53 in 1985, if the last four years of inflationary price increases on 2 per cent milk continue for another four years. The hon. member for Willowdale (Mr. Peterson), of all places, asks about Billy Bee honey. I can assure you, Mr. Speaker, that if that hon. member partakes of Bill Bee honey, that is the sweetest thing about him. A 12-ounce jar of Billy Bee honey which sold for 31 cents in November, 1970, will sell for $2.10 four years from now if something is not done. I point out for example, that sirloin steak, which cost 99 cents a pound in November, 1970, and which now costs $4.69, will cost $13.88 per pound by 1985 if we do not halt the price increases we are referring to in our motion. We have a situation now where the apple juice I referred to earlier, which cost 34 cents in November, 1970, and which currently costs $1.13, will cost $1.61 four years down the road. This is why I urge all members to take a serious look at our motion instead of meekly sitting on the government benches accepting what has been told them by their masters. If they cannot take a serious look at this during this debate, then I suggest they do so in the discussions which should ensue concerning the plight facing this nation.
I see, Mr. Speaker, that you are trying to attract the attention of the House. I do not know whether it is because of my time or whether it is because you wish to make an announcement. In any event, I await your words.


The Acting Speaker (Mr. Taylor):: The hon. member's time has expired.


Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, I notice that the member who just sat down was very generous in his use of nicknames with regard to methods by which he identifies some members on this side of the House. I think he might be interested to know that quite often the Liberal caucus refers to him as the Elmer Fudd of Tory economic policy. So the names do go both ways, in case the hon. member is interested.

May 14, 1981
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I would have thought that the opposition party would have given some weight, if you will, to their motion by at least calling for a vote on it. But what we have is a motion which will be talked out at ten o'clock tonight. The motion will be over. It will not be put to a vote and, in effect, it will die on the Order Paper. I wonder how sincere the opposition is about the criticisms they are making with respect to the actions being taken by this government.


Sinclair McKnight Stevens: I rise on a point of order, Mr. Speaker. Because amendments can be made to the motion, it would be most helpful at this point if the hon. member would indicate, if we do call for a vote on this motion, whether he will vote in support of it.


The Acting Speaker (Mr. Taylor):: That is not a point of order. The hon. member for Sarnia may continue his remarks.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I certainly would not vote for such a motion because, frankly, it does not hold up under any kind of scrutiny at all, particularly when one remembers what was done by the party opposite when it formed the government.
I welcome the opportunity to say a few words on this particular subject since I think it is a matter of serious concern to all Canadians, whether it be 1970 or in the present circumstances. We are all concerned about what is happening at the present time with respect to the economy and what the impact will be on us, our children and our children's children. We have a heavy responsibility to do more than engage in what is, in my view, simply condemning rhetoric.
In answer to a question earlier this week, the Minister of Finance (Mr. MacEachen) said he would await with interest some constructive criticism from members opposite to help in this Fight against inflation. I, too, as chairman of the Standing Committee on Finance, Trade and Economic Affairs would have welcomed suggestions about how the economy might be improved, about what actions we might take to curb inflation and about methods which could be used to bring down interest rates. I would have been happy to weigh those views and suggestions and, where I could agree with them, to press them upon the Minister of Finance of this government. But, Mr. Speaker, I have waited in vain. I heard a great deal of rhetoric and condemnation but very little in the way of positive actions which could be taken to reduce inflation in the country.
I listened to the former minister of finance, the hon. member for St. John's West (Mr. Crosbie). I thought he would have given us something a little better and more self-serving than the suggestion that we should reintroduce his budget. His was a budget which was defeated not only in the House of Commons but in the country when put to a vote. What kind of a recommendation is that? It is a kind of stand pat suggestion which was rejected by this House and by the people of Canada.
Listen to this, Mr. Speaker:
-we wage the battle against inflation, Mr. Speaker. It is to save those and to defend those who are having their savings destroyed; those who are so essential to society that we need to save, and see that their savings don't go down the drain because governments are unwilling to fight inflation. That is what high interest rates are all about, because the world, the western industrialized world,
has not conducted its economic and monetary system properly, so that we are in a period of high inflation.
That high inflation has to be dealt with, and that is our main enemy if we are to have any kind of progressive society in the future here in Canada. That is why interest rates are high. Why are interest rates high? They are high because we have an inflation rate ... annualized during September of 14 per cent. Because our dollar has fallen in value to 83 cents or 84 cents, those imports are costing us more and adding to our inflation. Therefore, we have to try to protect the Canadian dollar, to protect it from falling much further because of the effect that will have on the inflation we are importing from the United States.
We do not have high interest rates because this government wants high interest rates. That is not our policy. As politicians we do not want high interest rates. The people do not want high interest rates. Nobody wants high interest rates, so it is not a policy of the government to have high interest rates, it is a condition that the government cannot do anything about at the moment. It is not through choice.
Those are not the words of our Minister of Finance, Mr. Speaker; those are the words of the hon. member for St. John's West when he was minister of finance and responsible for guiding the economy of this country. It was at a time when he recognized the problem and defended the impact of high interest rates.
The people of Canada know that the fight against inflation will be long and difficult. Inflation has been caused by a series of events and the Canadian public, fortunately, are sophisticated enough to appreciate that it is not solely the government which is to blame for the problems we face today with respect to inflation. There have been many who have contributed to inflation. For that reason the fight against it will be difficult.
But it is not a Fight from which we can back away. The people of Canada know that the quadrupling of the price of oil by OPEC and subsequent increases have played a major role for the worst in our economy. Canadians who live under the banner of rising expectations make the fight against inflation very difficult. American interest rates impact in a monstrous way and now even Germany, in effect, is saying to the United States, "Cool it!". Germany is telling the United States to watch what it is doing to the economies of the industrialized world. Not just Canada is suffering from this impact, Germany is now speaking out and indicating its concern with the impact of high interest rates on its economy.
Whenever we have unfettered demands for unreasonable wage and salary increases we have trouble of the most serious nature. I am happy to say that union leaders are more reasonable and understanding now than I have ever known to be the case before. However, they too have a constituency. They have an obligation to represent the people who have elected them to a position of trust and to a position of looking after their interests. Those companies which charge what the market will bear, rather than setting themselves a standard where they would get a reasonable return on investments, do great harm to the economy. All of these factors can be shown to have a substantial impact on any attempt to control inflation.
I believe the Governor of the Bank of Canada is right to be concerned about the strength of the Canadian dollar which now fluctuates somewhere between 82 cents and 85 cents U.S.
May 14, 1981

Those who buy goods from abroad recognize that a weaker dollar would push inflation beyond tolerable levels. I have heard the comment, "Why don't you just say, okay, no more increase in interest rates, or pass a law to reduce interest rates?" Where would the dollar plummet? Who in this chamber charged with the responsibility of deciding would make that particular move? Only someone totally irresponsible or one who does not have to face the music of the plummeting dollar.


Mr. Mayer:: That is what Herb Gray said a year ago.


Jack Sydney George (Bud) Cullen: Once, on a visit to the OECD, I asked a couple of economists and two politicians from other countries who were interested in this subject and involved with the finance departments of their own countries: "Tomorrow, if you were named the economic czar of Canada and had the uncontrolled right to take action, what would you do for us, as Canadians, to control inflation?" Not one of their suggestions had practical, political credibility. There were ideas such as closing down all the inefficient industries; to force some corporations to join together to rationalize, to give each a particular share of the market; to do away with unemployment insurance, that without it people would find work because they would have to and they would be satisfied just to be working. Suggestions were made to stop DREE, as it forces corporations to locate where it is economically inadvisable to conduct business; to raise taxes to cover our deficit. I wonder, if that kind of action was taken, raise taxes on whom?
They said we should encourage foreign investment and close down FIRA. They said we should raise the price of stamps to cover whatever it cost to run the Post Office. If management in the Post Office saw that they would lose business by being inefficient, they would work together to become more efficient so that the cost of mail and parcel delivery would decrease. I told those particular advisers that I was thankful they were not the economic czars of Canada. I told them that in Canada, instead of having a revolution of rising expectations, we would have a revolution of a different kind.
Because we are in the Parliament of Canada, we should be making suggestions about what the federal government can do to assume its responsibility in its fight against inflation. Much pleasure has been taken by the opposition in tweaking the Prime Minister (Mr. Trudeau) for saying on one occasion that we had wrestled inflation to the ground. I would like to remind the opposition, and maybe the Prime Minister as well, that wrestling is often, at best, two out of three falls. Maybe the battle is even at the present time and we still have a job of work to do if we are going into that particular ring.
At the present time the deficit is barely manageable, and for it to become much larger is unthinkable. So one area we must look to is reducing our demands on the taxpayers' dollar. Not too often do I hear MPs suggesting we should cut expenditures, or at least in any amount which would have a significant impact on the deficit. I have heard expressions like "a stimulative deficit", "spend more money", "use more money", "do more protecting", to use this money and call it a stimulative
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deficit. My concern there is that if it does not stimulate, then we have nothing but a larger deficit, again working to the detriment of the Canadian public and certainly of the Canadian economy.
I hear from time to time that certain protections should be put in place, and it has a nice ring to it. But protection costs taxpayers dollars. I was not here at the time the hon. member for St. John's West introduced his mortgage deductibility plan. However, I studied the idea of it and I talked to people who saw it in place in the United States; after all, my riding is a border community. I was very pleased to note that we did not adopt that particular program because there would have been a built-in cost factor which we would have found very difficult to unload at some time in the future. I think it would have been reprehensible for Parliament to have adopted that particular program, knowing the cost of it and knowing that even though it is really basically unacceptable to the government of the United States, now that it is locked into it there is no way that it can get out.
We did take some action in the areas of most vulnerability. The guaranteed income supplement was increased immediately after this Parliament resumed. I think that was an appropriate move. I would like to see the government give some thought to issuing tax-free bonds where money derived from that particular source could be used for government projects. We should be looking at that area, and I have made that suggestion to the Minister of Finance.
I would like to join with a portion of the comments made by the Minister of Agriculture (Mr. Whelan). I do not think they should be forced to do it at the present time, but I think banks and trust companies must look to their social responsibilities in this Canadian society. Mortgages become due, and "boom", immediately up goes the interest rate. A company which has made a substantial amount of money as a result of someone who has paid on a mortgage for five, ten or 15 years should surely let that individual know that he is a good creditor who can be depended on, and that he has given no difficulty because he has kept up his payments. Surely these institutions have a social, moral and, for that matter, should possibly have a legal obligation to see to it that they protect the customers they encourage to come in and borrow funds, and from whom they have made a significant profit. They must face up to that particular social responsibility.
When one is in a one-industry town and there is a major strike, mortgage companies, not because they want to but because they really have no alternative, must find a method not to foreclose on mortgages, giving those who are on strike a little time instead of demanding that the full backlog be paid up immediately. When a strike lasts for six months or a year or some time-frame like that, a way must be found to accommodate those who are on strike. If these companies do not do so, they know that they are acting at their peril because when those people are back to work they will no longer deal with that particular institution. They do it not because they want to, but because they have to.

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I think banks must be reminded that it is not a computer print-out with which they are dealing but people. I am not as much concerned with showing a large profit at a time of difficulty as I am with convincing banks and trust companies that they have an obligation in tough times to see to it that they do what they can to help, particularly their steady customers and those from whom they have made substantial amounts of money. This is particularly true when they are trampling on their hopes, dreams and aspirations which are completely shattered for the sake of the few dollars which they could not come up with, even though they have come up with money over the last five, ten or 15 years. There comes a time when the Canadian public says that enough is enough, and they will put pressure on politicians to say that banks must accept this responsibility.
I think the banks should be reminded that in the provinces landlords were too tough on tenants, with the result that the provinces moved in with rent controls and provisions in landlord and tenants acts to protect tenants. I think they have probably gone too far in some instances; but the legislatures and the politicians had to react. I say to the banks and trust companies, be careful; people will only be pushed so far. Then they will push their politicians to do in the short run what they may see as necessary but which we might very well know will be counterproductive in the long run. If they do not recognize their social obligation, they will be acting at their peril.
Naturally, to help the economy we must come to an agreement with respect to the price of oil and gas in Canada. We have to have an agreement between the producing provinces and the federal government. I am happy to see we are prepared to make concessions to try to arrive at some form of agreement on pricing which will not totally decimate the people who have to buy the particular product. At the same time it will give a fair rate of return to the people who are doing the producing and to the producing provinces.
It seems to me that what is taking place now is good, that the officials are meeting, and we are at least talking about the same set of figures. At the federal level we have a tendency to say that the split for a barrel of oil is 45, 45 and 10, and the provincial government says that that is not true because there are other taxes and benefits which we at the federal level derive which makes that figure inappropriate. Let us get the figure down and agreed upon. Surely that is step one.
We should then say to industry, which wants to get back working, which wants to go on exploring, which wants to expand, "You will derive a certain figure from a barrel of oil and that is the bottom line. That money will be available to you." For the balance, let the federal and provincial governments work out some form of agreement but not hold up progress, so that these people can work.
I am proud of the fact that the federal government saw fit to make $40 million available to keep one particularly large project operating until, I believe, June 1, in order to see if some settlement could not be reached prior to that time. The
pressure is on; concessions will have to be made. I know that at the federal level we are prepared to do this. I am satisfied with the minister when he says he will move in that direction. I hope we can expect the same kind of co-operation from the producing provinces.
There is one other area of pricing that I should like to deal with. We have already indicated in the case of the tar sands and heavy oils that we are prepared to go to $37 per barrel, plus an indexing factor. That may not be enough but it strikes me that it is a substantial amount of money. Surely that is an area in which there can be negotiation. Maybe that figure is fine at the moment; to my way of thinking it seems to be adequate as the bottom line, given the fact that there is a built-in index.
My colleague from the riding adjacent to mine has indicated that he would like to see a two or three-price system; one price for the heavy oils and tar sands products, one for the ordinary oil, and more funding made available to the marginal wells. That would put a lot of people back to work on those wells because they would then be economically viable.
I note your indication that my time is about up, Mr. Speaker. I should just like to repeat what I said at the beginning, that rhetoric will not bring down inflation. We must all recognize that the solution is with us, that each of us in our own sector has a responsibility to do what we can to alleviate it. We must give protection to vulnerable members of our society, as we have done with the guaranteed income supplement. I think we must also give more money to bodies like the Farm Credit Corporation.
At the government level we must learn to say no unless it can be shown that the expenditure of more money will involve an investment which will be beneficial to the economy of the country and to all Canadians.
I do not envy the Minister of Finance in his very difficult and perplexing role. I know that he is sincere in his concern for his fellow Canadians. He is an individual who has taken on an almost impossible task and is doing what I think is a superb job.


Some hon. Members:: Hear, hear!


Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, the government's complacency in regard to economic issues is clearly illustrated by the agenda which it has placed before Parliament since this session began.
The government rejoices when its bad record at job creation in April compares favourably with its worse record in March, but this brings little comfort to the families of 886,000 unemployed Canadians.
The high interest policy of the government, which is now counterproductive and is contributing directly to increases in prices, has destroyed home building and condemned thousands of Canadians to renting expensive apartments with the certain knowledge that the rents will go even higher.
This government stubbornly refuses to bring in legislation to permit Canadians to deduct their mortgage interest from their
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income tax, as the leader of the Progressive Conservative government did. It will, however, continue to allow the wealthiest industries in this country to deduct their interest payments from their income for tax purposes.
The economic recovery of our nation and the elimination of areas that suffer from regional disparity requires a plan. We need a national industrial strategy, and a piece of the action, at long last, should go to the Atlantic provinces.
The battle with regional disparity in Atlantic Canada will be won or lost on the industrial front. The development of secondary manufacturing is the top priority for the economic recovery of the Atlantic provinces. Secondary manufacturing must be upgraded, more specialized and more efficient. The benefits to the Atlantic provinces and the rest of the country are obvious.
At this point in time the Atlantic account, in terms of federal expenditures, shows that the Government of Canada spends $5 billion more each year in the Atlantic provinces than it recovers in revenues. It is therefore in the Atlantic provinces that a new industrial capacity, in terms of its impact on the totality of the nation, would be most beneficial. If we expand the industrial base, then we expand the revenue base for provincial governments and enable them to become less dependent on equalization and transfer payments. This would require fewer federal dollars and would be of direct benefit to every taxpayer in Canada.
The Prime Minister (Mr. Trudeau) and the Minister of Regional Economic Expansion (Mr. De Bane) can mount an effective argument in persuading large industrial taxpayers to consider the Atlantic provinces in terms of their future expansion. It is in their interest, indeed in everybody's interest, to develop a broader tax base in Atlantic Canada in order to whittle away at transfer payments.
In terms of development, we have to ask ourselves where we are going to be in 1990 and in the year 2000. I want Atlantic Canada to be standing on its own two feet and making a net contribution to Canada, and I believe it will take strong financial incentives and moral suasion to bring this about.
The 50 per cent tax incentive credit that the government has recently brought in is a step in the right direction, but it has one glowing deficiency in that it does not apply to all of the Altantic provinces. Specifically excluded from the incentive is the area in New Brunswick with the greatest industrial potential for manufacturing plants, and that is the Moncton-Saint John-Fredericton triangle.
Another incentive recommended by the New Brunswick Development Institute and ignored by the government is the 30 per cent tax incentive for labour costs in manufacturing plants for the first three years of operation. This is intended to offset the training costs for employees in new plants at new jobs. The greatest benefit of these two incentives is that they would not cost the federal treasury anything. They would only postpone the tax-paying liability of companies that do not now exist and so do not pay taxes; in fact, taxpayers would be
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created. This would meet the requirement mentioned earlier by an hon. member opposite.
We need strong incentives and these are important, but so is the element of persuasion.
The government missed the chance to contribute to a more balanced economic growth in western and eastern Canada when it signed the auto pact. The government failed to use the opportunity to persuade the automobile giants of the importance of locating some aspect of their industrial empires in eastern and western Canada.
The social benefits of 500 jobs would have far greater impact in Altantic Canada than anywhere else in our nation. The taxes derived from 500 taxpayers would nibble away at the need for equalization grants and federal transfer payments. Where nearly one dollar out of two spent by governments in Atlantic Canada can be traced back to the federal government, there is a real incentive for an enlightened federal government to look at this proposition very seriously.
Secondary manufacturing plants have a great development impact because they buy goods and services, employ a large number of people and stimulate other service and support industries.
I want to pay tribute to DREE and to those who have worked hard to establish our industrial parks in Atlantic Canada. These industrial parks have made a contribution to development, but regrettably more often than not we find very few manufacturing plants in our industrial parks. Space is taken more by warehouses, wholesale and commercial undertakings which, while they are very important, do not create the number of jobs that a manufacturing plant would. In order to attract manufacturing plants, strong incentives are essential and so is moral suasion exercised by the Prime Minister and the ministers of the Crown.
In order to create a climate attractive to industry and development we need many things. One of them is a sound transportation policy. The maritime provinces through their governments working with DREE and the Department of Transport have taken some good steps in this direction, but there is much yet to be done.
The blueprint for the development of the port of Saint John has to be followed aggressively, and a similar blueprint for the development of the port of Halifax has to be put in place and acted upon. The significant transfer of shipping from Halifax to Montreal is a horror story that should never have been told. It should have been nipped in the bud by the alert ministers of the Crown from Nova Scotia and the Minister of Transport.
The retrenchment of rail and express services in the maritime provinces is a betrayal of one of the fundamental reasons for our entry into confederation. This government of contradictions that, on the one hand, enshrines the principles of equalization in our Constitution and at the same time sets in motion a parliamentary task force to examine federal-provincial fiscal arrangements with a view to reducing them, is now

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talking openly about putting its contribution to the improvement of the transportation systems in the maritimes in an envelope. It will essentially pass the buck to the maritime governments themselves to decide which mode will get the least. Why? Because the federal government has no policy, it has no strategy, it has no plan, and it will not take the time to sit down with the provincial governments involved and work one out. It would rather bunch its meagre efforts in one bundle than allocate the funds in accordance with a meaningful plan so the cutbacks in its reduced efforts will not be so apparent.
In Prince Edward Island the federal-provincial development agreement is moving ahead like a fly with a wooden leg walking across a saucer of molasses. In New Brunswick, the subsidiary agreement to provide federal assistance for small business incentive programs has expired and not been renewed. The highway subsidiary agreement has expired and has not been renewed. The tourism agreement has expired and has not been renewed. The fisheries agreement has not expired because it has never been completed. These are good programs. They create a climate attractive to industry. They should not have been allowed to expire. We are now two months into the current fiscal year and without the agreements, the funds allocated for the programs cannot be spent. This is not good planning. It is not good administration. The government is not doing its homework and is not operating efficiently.
I would like to identify some individual projects for the government to consider as it contemplates its next budget. Most of these projects will not involve expenditures which have not already been contemplated, but would, I believe, focus them in a more meaningful way.
The forestry complex to be located at the university of New Brunswick would put meaning and purpose into research and development for the vital forest industry in New Brunswick. It is an urgent necessity that has attracted the interest and support of two of the more able ministers of the Crown, and I hope that their enlightenment will soon be shared by the Treasury Board. This project would give industry a window on research that would be very valuable for the whole Atlantic region.
I would like to see the practice of contracting out research and development projects of large magnitude continue, but I would like to suggest that very large contracts in this field could be used as an inducement to our high technology industry to promote a more balanced growth across the country. I realize it is not possible to suggest that an industry should locate in an area in order to get a grant, and then find out that it is unable to sustain its production after that, but I do suggest that it is a factor which, combined with other elements, should be considered. In this regard, I would like to see the appropriate ministers of the Crown set up an interdepartmental committee to address the prospect of giving a development dimension to research and development in our high technology industry in Canada.
I would also like to see the Department of Supply and Services take another look at its procurement policy with
respect to foreign aid. Right now the department centres its bidding process on goods delivered to the port of Montreal because it is from that port that it ships its supplies to developing countries. I would like to see this practice varied once in awhile and the ports of Saint John and Halifax used as the gathering point to give a better chance to suppliers in Atlantic Canada to participate in these large orders.
Before closing I would like to touch upon two development opportunities in my riding. In the town of Oromocto we have a large number of vacant married quarters for armed forces personnel stationed at Canadian Forces Base Gagetown. The changing complexion of the armed forces which sees more single persons than has been the case has resulted in the depopulation of the town of Oromocto which was created originally by the Department of National Defence. This model town was originally designed as a combination of civilian and military personnel and for many years operated under the direction of a commission, with a majority of its officers being appointed by the Department of National Defence. Over a period of time it has evolved and acquired the status of a town. It now elects its own government, the same as other Canadian towns.
I feel that the Department of National Defence still has a moral obligation as the largest taxpayer in the town and as its founder to do all it can for the well-being of the municipality and the people who live there.
The depopulation of the town of Oromocto has created a serious problem in the school system, and commercial and professional people in the town do not have the same potential as they had before the population decreased. Strong efforts are being made to attract industry to the town, and I think the government of Canada should do all it can to assist it.
Specifically I would like to see the Department of National Defence give serious consideration to stationing more personnel in the town and make a greater effort to fulfil its obligation, both to the armed forces and to the people of central New Brunswick.
In New Brunswick we have one of the most beautiful natural attractions in the world in the Saint John river which divides the city of Fredericton and is bordered by a very attractive green. I would like to see an in-depth study done of the recreation potential of the river. Environment officials tell me that it is essentially pollution free, although an incident last winter would have to be checked out. Any such study would have to check carefully all the safety factors. The question of fluctuating water levels and its effect on safe swimming, boating and skating would have to be given very careful consideration. The topography and condition of the river bottom and the possibility of moving in sand to locate some beaches are other factors.
Now that the two government wharfs have been removed for the access roads leading to the new bridge, the question of a new wharf to permit boating and river boat cruises has arisen.
One very attractive proposal for the development of river boat cruises along the Saint John river is taking shape at this
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moment and it has my support. I think the development of natural resources such as the Saint John river for our own people as well as tourists would make New Brunswick a very attractive site for developments of all kinds.
I mentioned this last project because it has a very small federal content and would essentially be developed by two other levels of government. However, it is important for us as members of Parliament to identify projects which can be accomplished with staff and resources that are now in place. It can make our areas in Canada more attractive for development.
The government has suggested that the opposition is using this opportunity just to be negative and to expose the government's frailties. I have chosen to lay before the government some positive suggestions which I hope will attract its attention. They would involve very little in the way of more investment on the part of the government, in fact none that has not already been contemplated in the estimates.


James Scott (Jim) Peterson: Mr. Speaker, I welcome this opportunity to speak in this debate on the severe increase in interest rates. In so doing, I would like to address two major points. First, I would like to sum up the facts as they relate to our present economic circumstances. Second, I want to respond to the challenge presented by the Leader of the New Democratic Party to deal in a positive and constructive way with some of the alternatives which have been presented to us, not only by his party but by the official opposition.
First, it must be recognized that Canada, more than any other nation in the world, is dependent for its economic well-being, economic health and economic fundamentals on world trade and international capital flow. More than 25 per cent of our gross national product comes from exports, and this is a higher figure than even for Japan. We are not an isolated nation. We cannot set out to conduct our economic affairs on the basis that we are in watertight compartments, or that we are an island unto ourselves. World economic realities are there and always will be, and the moment we as Canadians ignore those economic realities and start to look inward we will begin to suffer severe economic consequences.
What are some of these facts which relate to our present economic condition? I want to set these forth in the light of the seven major countries in OECD. These are Canada, France, Germany, the United Kingdom, the United States, Italy and Japan. Let us look at the way in which Canada relates in its economic performance to those specific countries. I want to do this within the context of the theory which has been put forward that other countries have had to go to world prices in oil, have gone to world prices in oil and have been able to digest those prices within their own domestic economies.
Yes, they have digested world prices for energy but at what price; what price have they had to pay? I want to look at this because, in looking at the facts, we will see that since 1973 they have digested these higher prices for oil at great cost to
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themselves. Let us look at this in terms of unemployment rates. Of these seven OECD countries including Canada, Canada is the only one to have had a decline in unemployment every year since 1978. We are the only country with a lower unemployment rate today than in 1978.
Let us look at manufacturing employment, and manufacturing employment is part of what we are promoting through our industrial strategy. Since 1973, of the seven OECD countries, Canada has had the highest increase in the number of manufacturing jobs. Only Canada and the United States have had an increase in the number of people employed in manufacturing.
Let us look at total employment, and I believe it is important to look at this because when we are dealing with employment we are dealing with human beings and the dignity of individuals who have the opportunity to work. Unemployment is more than a statistic. Unemployment is a tragedy when it occurs in the human family. This is why we have to look at these figures.
In terms of total employment since 1973, when the increase in OPEC prices occurred, Canada has had the highest growth rate in total employment of those seven OECD countries. It has been over 3 per cent a year. The next highest was in the U.S. with 2.5 per cent. All of the others have had a growth rate of less than 1 per cent. In fact, Germany, often held out to us as the paragon of economic virtue, had one million fewer workers employed in 1980 than it did in 1973. That is the price Germany has had to pay for digesting world energy pricing.
In terms of economic growth, between 1973 and 1980 all top OECD countries have had a reduced rate of economic growth. We do not like this but it is a fact. We have all suffered, but Canada's decline in economic growth has been less than that of all those other OECD countries.
Let us look at our merchandise trade balance. Canada is the only OECD country to have an increase in its merchandise trade balance in every year since 1978. As a matter of fact, last year Canada's merchandise trade balance surplus was higher than that of Japan.


An hon. Member:: Oh, don't be absurd.


James Scott (Jim) Peterson: The hon. member opposite should look at the figures. I would be happy to give him those figures released by OECD.


An hon. Member:: I don't care who released them.


James Scott (Jim) Peterson: In the last 12 months our merchandise trade surplus was $6 billion, and in Japan it was $4.7 billion.
Exchange rates have come under pressure throughout the world. There has been a decline. The French franc, the Deutschmark and the yen have declined from between 5 per cent to 12 per cent in the last three years, with the rapid increase in OPEC prices, against the U.S. dollar, while the Canadian dollar has remained constant.
Let us consider inflation rates. None of us wants or likes inflation. We all think inflation is too high. This is why we are

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taking responsible measures to try to bring it down, but all of these OECD countries have had an inflationary increase of approximately 3 per cent. Our inflationary increase has not been out of line with those of our major trading partners. I can say the same for central government deficits. They again have followed that line.
What do these figures indicate to us in the real world? None of us like huge fiscal deficits, none of us like high inflation rates, and none of us like high interest rates, but what these mean is that we have not been using these fiscal deficit tools in a totally unconstructive way. We have been using them to promote employment, create jobs for people and give dignity to families. We have been using them to promote economic growth. None of us is proud of present circumstances, but I think, when we look at them within the context of the real world, we have to say perhaps that we can do better, and we have to find ways to do better. However, our performance has been better than that of any of the other major countries that count in this area.


Some hon. Members:: Hear, hear!


James Scott (Jim) Peterson: Let me accept the challenge put to us by the Leader of the New Democratic Party (Mr. Broadbent) to respond to the alternatives presented to us. The hon. member for St. John's West (Mr. Crosbie) during the question period on Tuesday said that a speedy energy agreement would help us to protect Canadians against downward pressure on the Canadian dollar. That is true, but the question is: an agreement at what price? We are not prepared on this side of the House to accept an energy agreement based on any price. This must be a price that is related to the cost of becoming self-sufficient in energy, and not a price tied to an artificial "X" per cent, whatever that may be.
I was talking yesterday with someone involved in the energy industry in the west who suggested, as a reasonable scenario, that within three years the world price of petroleum energy could be $80 a barrel. That could be the world price, but our price must be a price that is made in Canada, based on Canadian realities and Canadian needs for production. That is the basis for negotiating a reasonable agreement with the provinces which is not artificially tied to some price unrelated to Canadian needs, Canadian supplies and, particularly, the needs of Canadian consumers.


An hon. Member:: Tell that to Saudi Arabia.


Some hon. Members:: Oh, oh!


An hon. Member:: Would you work for half wages, Jim?


James Scott (Jim) Peterson: A gentleman across the floor asks if I would work for half wages. In this world there are people who work for 25 cents an hour and there are people who work for thousands of dollars an hour.


An hon. Member:: What has that got to do with it?


James Scott (Jim) Peterson: What that has to do with it is that there are circumstances and realities that exist in every country, and they are different. If the hon. member thinks uniform wages, uniform prices, uniform conditions of work, uniformity of humanitarian conditions can apply in every country in this world, then I say he is living in a Utopia.


An hon. Member:: Sell us your cars at half price.


James Scott (Jim) Peterson: Let us look at what the Right Hon. Leader of the Opposition (Mr. Clark) suggested to us this afternoon. He suggested that perhaps our priorities in acquiring the shares of Petrofina were not proper. That is an investment owned by the people of Canada.


Thomas Edward Siddon: A bunch of gas stations.


James Scott (Jim) Peterson: Yes, as the hon. member opposite says, these are a bunch of gas stations. Let hon. members opposite tell us if they object to having a vertically integrated company in the oil business-


Thomas Edward Siddon: Yes, we object.


James Scott (Jim) Peterson: -the only one of the top ten which will have stations from coast to coast and which is owned by Canadians for the benefit of Canadians. Have they changed their views on the role of Petro-Canada? Have they changed their views again on how they treat Petro-Canada? Petro-Canada was anathema to them a couple of years ago. Now they accept it. Even their energy critic feels it is a strong asset to Canada to have Petro-Canada. We have strengthened Petro-Canada. We have strengthened the ability of Canadians to invest in their future.


William James Kempling: How many more barrels of reserves have you got now?


Mr. Roberts:: They don't want Petro-Canada.


James Scott (Jim) Peterson: I would be delighted to answer all the questions hon. members opposite have to pose to us, but I would also like the opportunity to continue to respond to the particular issues they have raised because I feel that in many cases there is merit in considering what they have indicated to us.
One of these cases is the suggestion made by the Leader of the New Democratic Party that we have the possibility within our hands of pegging the Canadian interest rate below that of the United States and that we need not be tied to it. We have all heard eloquently expressed in this House and, I think, factually expressed the problems this will create in terms of money flows. We have heard about how we are linked to the United States economy and the United States capital markets and about the problems which would result. The Leader of the New Democratic Party admitted quite frankly that there would be these outflows of capital, but he suggested that there was a way to cope with them. What he suggested was a means of exchange controls, and he said that the precedent comes
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from the United States. He did not mention it specifically but I think he was referring to the interest equalization tax which was introduced by President Kennedy in 1962, to the 1965 voluntary guidelines, and then the 1968 mandatory guidelines. These measures were introduced by the United States to counteract adverse balance of payments prublems the Americans were having. The interest equalization tax was designed to penalize foreigners who were coming into the United States to borrow. One had to pay extra interest rates as an excise tax on money being borrowed in the United States at that time. That, quite frankly, is a possibility which I know we have had under consideration. I think we have to look at the example of what is happening in the United States. The interest equalization tax and the two guidelines of 1965 and 1968 were removed in 1972 by President Nixon, having been proved ineffectual. However, I do not think any of us should ignore the opportunity to re-examine new ideas and concepts at this time. I welcome the receptive attitude of our Minister of Finance (Mr. MacEachen) and our party toward exploring these new ideas because all of us are engaged in the search to create a better economy for Canadians.
The last area I would like to explore in an effort to look at the new ideas and new alternatives which have been put forward is the whole question of an industrial strategy. I think all of us agree that the real question with respect to bringing interest rates down involves bringing inflation down, and that involves over the long run-and there is only one way to do it-increased productivity among Canadians. If hon. members think there is a magic fix or a quick solution, there is not. We need increased productivity amongst Canadians. We are involved in a long-term search for that.


Mr. Deans:: Where is the market?


James Scott (Jim) Peterson: The hon. gentleman opposite asks me where the market is. Would he please listen? I will come to that. He should not get impatient. He is not yet running for the leadership of the New Democratic Party in Ontario. If the hon. member listens, I will come to that.


Ian Deans: I am listening.


James Scott (Jim) Peterson: We have some very critical issues which we as members on both sides of this House must resolve. First, are we going to try to select winners and losers in this area? I present hon. members with one problem. The furniture industry is moribund in Canada. On the other hand, I know of individual furniture manufacturers who have found holes in the international market. They are filling them and exporting aggressively. Do hon. members want to wipe out a whole industry when there is one or a couple of companies in that industry which are doing well? Do we focus on the industry or the company? This is one of the questions we must resolve.
Second, are we going to concentrate on certain types of activities, such as manufacturing? I say yes. High technology? Yes, it is the way of the future, and we have demonstrated in many areas that we can do this. I do not think we should ignore the service industries. After all, more than 50 per cent
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of people employed in Canada are working in our service industries as white collar workers. Let us not ignore the facts. Let us look at the realities and deal with them. We are not here for pie-in-the-sky solutions.


Harvie Andre: More work for lawyers.


James Scott (Jim) Peterson: Yes, more work for lawyers, accountants, bankers and insurance people as well.
One of the possibilities we can consider is creating in Canada a world financial centre, the way The Netherlands has, through propitious use of our tax laws. That is one opportunity we should not ignore.
Another major question we must face is whether we are going to benefit under our industrial strategy, foreign owned or only Canadian owned.
Another problem we have to address in coming to a resolution of this question is what type of activities we want to encourage. In this area I suggest we want to encourage export-oriented industries using world product mandate techniques, and I say this in response to the hon. member opposite who asked, "Where are the markets?" Canada's market of 23 million people will never suffice to create the economies of scale we need to be effective competitors. Our horizons are on the world, and our trade minister is demonstrating this in the efforts he is making to find new markets for us.


Some hon. Members:: Hear, hear!


Ian Deans: We have 20 per cent unused capacity now.


James Scott (Jim) Peterson: The other types of activities it is incumbent upon us to encourage are research and development. Without increased research and development, be it in the white collar area or in manufacturing, we will not be competitive on a world basis.
There is a number of means we can examine in the area of developing an industrial strategy. How are we going to do it? Are we going to have increased bureaucracies in which government officials determine who is a winner, who is a loser, who gets what and who does not? In some areas we might have to. We might find, after consultation, that that is the most effective way, but I suggest we will find that the most effective way will be to pick our winners and look at the Income Tax Act. Who are the people who are making profits and who have demonstrated their ability? What about incentives for those people who have demonstrated ability and want to reinvest in Canada?
In terms of our industrial strategy, we could also look at the utilization of FIRA. FIRA is an instrument by which we can encourage greater use of the world product mandate. This is where we produce in Canada a limited run of goods of one type and of a similar kind. We cannot produce 20 brands of refrigerators in Canada, but we can produce two and sell them around the world. That is the way we get economies of scale. To my way of thinking, that is part of the industrial strategy and part of the forward thinking we are doing.

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Let us recognize that under our industrial strategy we can build on the success we have. Such successes are Mitel, ATCO, Dominion Trucks and our resource-oriented companies. We do have opportunities. We need to have co-operation between the government and the private sector. I am not ashamed to look at the example of the minister of international trade and investment in Japan. Japan encourages active cooperation between the private sector, financial institutions and business. This involves the creative use of all the talents of government and the private sector. That is the way we make winners in the capitalist system. That is the way we make winners in our economy based on the free enterprise system.
There are many challenges before us. I wish hon. members opposite had taken more time to discuss in detail positive alternatives because I believe these alternatives are within our grasp. I am proud to be part of a party which is actively seeking out those solutions and dealing with them.


William James Kempling: You would make a good president of the flat earth society.


An hon. Member:: You are going down with the ship, Jim.


The Acting Speaker (Mr. Blaker):: Order, please. I see the hon. member for Hamilton Mountain (Mr. Deans), but I do not think I can recognize him because it is six o'clock. In fact, in accordance with the roster, another hon. member may have to be recognized before him. No other hon. member stood up, so the Chair has somewhat of a problem. However, I see the hon. member from Richmond-South Delta (Mr. Siddon) has risen to his feet, and that may resolve my problem. Does the hon. member for Richmond-South Delta wish to have the floor at eight o'clock?


Thomas Edward Siddon: Yes, sir.


The Acting Speaker (Mr. Blaker):: Provided the hon. member for Richmond-South Delta is in his place at eight o'clock, he will be recognized at that time.
It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6.01 p.m. the House took recess.


[Stage Direction]
AFTER RECESS The House resumed at 8 p.m.
Thomas Edward Siddon: Mr. Speaker, I regret the circumstances which require me to participate in this important debate that reflects the government's absolute incompetence and its mismanagement of our national economy. We are faced with record high interest rates now in excess of 20 per cent, double-digit inflation in the order of 12.5 per cent and, worst of all, the government has produced no significant programs. In particular, it has not produced its long-promised industrial development strategy in order to resolve the worsening economic crisis.
This evening I want to spend a few moments talking about my understanding of the causes of the problem and to dispel some of the myths we regularly hear from the other side. I want to talk about the impact of high interest rates and inflation upon the Canadian fishing industry, particularly on the west coast. Also I want to talk a little about some of the solutions we in this party see as being essential.
Canada is on a course of economic suicide because of the incompetent economic doodlers, from the Prime Minister (Mr. Trudeau) on down, who have set the country on a course toward economic disaster which may well be at least as severe as the great depression of the thirties. I believe high interest rates are but a symptom of a national disaster we are yet to confront.
Earlier this afternoon the hon. member for Willowdale (Mr. Peterson) said that higher interest rates are needed to get inflation down, in order to get interest rates down. What illogical rubbish! The hon. member should know better. It just does not work that way. Higher interest rates do not create a situation leading to lower interest rates. In fact, in a situation where taxes are too high, business confidence is low and profit margins are slim, companies, businesses, fishermen and ordinary people in the country have no room in which to manoeuvre. There is no profit margin left, and the consequence is what some technical people might call a synergetic or cyclical effect: the higher the interest rate becomes, the higher the inflation rate becomes, and the higher the interest rate becomes again. Then there is an amplifying headlong deterioration of the economy, leading ultimately to a disastrous consequence.
Last week and again today the Minister of Finance (Mr. MacEachen) said that the Canadian worker is to blame, that he earns too much and he expects too much of this country. What nonsense! The minister cannot blame the wage earners; he cannot blame wives, spouses or children; he cannot blame farmers, fishermen, small businessmen, pensioners, widowers, widows or school teachers. Furthermore, the minister cannot blame the Americans or Ronald Reagan. That is the phoniest excuse of them all. I did some checking today and learned that on this very day mortgage rates in the United States are at 16 per cent. Last August they were 12 per cent or 13 per cent. In other words, mortgage rates in the United States have increased by some 3 per cent to 4 per cent since last August. By comparison, mortgage rates in Canada, as of today's hike in the prime lending rate, have increased from 13 per cent to some 21 per cent-an 8 per cent increase in nine months. The increase in mortgage rates in Canada is double that of the United States for the same period. It is neither correct nor honest to suggest the situation is otherwise. In fact, the wide fluctuations in the U.S. prime lending rate bear little relationship, if plotted against time, with the fluctuations in interest rates which represent a progressive rise in this country.
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We cannot have a government continuing to misrepresent the truth to the Canadian people. The federal government causes inflation, and it knows as well as anyone else in this country that it does. As a consequence of inflation, we are faced with high interest rates. The Minister of Finance knows that, too. After all, who is overprinting the money supply? Who is incurring massive budgetary deficits of $100 billion plus? Who is borrowing against the future value of our natural resources, particularly those resources in western Canada upon which the federal government is so anxious to lay its hands? Who has tied up all of the people's money in Canada Savings Bonds and government pension funds, and then squandered it to pay ever mounting deficits? Who has forced all Canadian revenues, or at least $300 billion of those revenues, into real estate and housing because a capital gains tax was slapped on everything else, destroying the incentive to invest in business and entrepreneurial ventures, diverting that revenue into the housing market? Who has created a shortage of investment capital in this country by spending someone else's money on unnecessary programs of intervention by government into the private sector, by creating 400-plus Crown corporations, many of them unnecessary, by imposing a National Energy Program which confiscates resources and revenues and the free opportunities which private corporations in this country seek? Who has imposed red tape and overregulation upon the private sector of this country? Who is mortgaging the future and incurring bills which our children will have to pay, and how much does the interest payment amount to on those bills? In the present fiscal year it will amount to not $14 billion but something close to $20 billion which is needed to pay the interest to foreign and Canadian lenders on the deficits which this government has incurred. Why are funds fleeing south to seek refuge from the National Energy Program? Why are these funds fleeing south? Because there is a scarcity of oil and gas in the United States and investors are paid well for investing in oil and gas exploration in the U.S. That is where Canadian, American and other dollars are flooding to from this country.
There is another reason why the interest rates in this country must be as high as the government claims they must be. We are seeing the beginnings of industrial nationalization. As the Minister of Finance hinted this afternoon, there are other corporations which will be the next ones to be subjected to federal intervention. Perhaps banks, food stores, food chains, General Motors, farming and fishing industries will all be subject to nationalization if this government has its way. And the Solicitor General (Mr. Kaplan) sitting opposite smiles. In the Department of Fisheries and Oceans alone there is a pervasive attempt, month after month, to try to take a bigger piece of the action from private sector fishing companies, which is something I will deal with later on.
So we have the choice between propping up the Canadian dollar in order to keep it at an 85 per cent par with the U.S. dollar or our interest rates will have to go higher and higher. The alternative is to allow the Canadian dollar to collapse. Why is the government afraid of a devalued dollar? Because
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the government must then bear the burden of responsibility for its own economic mismanagement. It must bear it directly instead of forcing that burden upon the backs and incomes of ordinary Canadians everywhere who are innocent in this tragic dilemma which our country faces. We have spent almost 12 months in this House frittering away time debating a constitutional initiative which is dividing our country and creating ill will everywhere when we should have been dealing with these important economic problems.
I submit that the Prime Minister and the government should call a first ministers' conference immediately, tell the premiers that they will put this power play aside and get on in a spirit of co-operation with resolving our important economic crisis.
When will the Minister of Finance admit that our national economic problems are a direct result of a government which spends itself into power and attempts to stay in power election after election by promising all kinds of goodies to the taxpayer who must ultimately pay for these extravagances? The Canadian economy is suffering from this spend-spend-spend mentality, an approach which leads to politically expedient solutions and ideological frivolity which started in the early seventies and which will continue as long as the people of this country allow it to continue.
There are no signs of restraint in the budget introduced by this government a year ago. It is high time a new budget was brought in which would show indications of restraints. If we had been in government in this present fiscal year with the Crosbie budget in effect, the national deficit would have been reduced to 14 per cent of the annual budgetary spending. Instead, it will be more than 20 per cent with the higher interest charges on our foreign deficit. It is now approaching 25 per cent, or a charge of some $20 billion for the interest we must pay on our national deficit. The reasons for this problem really have to do with the wasteful spending habits of this government-the Mirabel airports, the great "metri-Can" boondoggle which will cost small retail businesses across Canada more than half a billion dollars, $600 million, in order to buy new scales from foreign multinational companies. These are scales which will be imported and, therefore, have a negative effect on our balance of payments. We want to buy gas stations to pretend that we are somehow in charge of our own economic energy destiny. We want to print government documents in duplicate, back to back, in both official languages instead of printing half as many documents in two languages. That is an utterly ridiculous waste of valuable Canadian newsprint. We have a great Canada Week put on at the expense of millions of dollars of taxpayers' money, trying to bludgeon Canadians into a feeling of loyalty which should come from inside, not be forced on them by government propaganda. We have the concept of CBC-2 which is absolutely unnecessary at this point in time. We have the minister responsible for culture saying that we should forget about foreign aid and think about a new art gallery for Ottawa since that is more important than getting control of our economic destiny. There are DREE grants to fat cat friends of the Liberal party, and government buildings leased from other fat

May 14, 1981
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cat friends of the Liberal party. They leave their lights on all night for which the taxpayers of Canada must pay. We have unnecessary government advertising on television and in our newspapers which costs the people of this country a tremendous amount in tax dollars. We have an unnecessary proliferation of Crown corporations. Mr. Speaker, those are just a few of the tremendously large number of extravagant and wasteful examples of incompetence and inefficient spending by this government. There is one final example which made me laugh. 1 read that we commissioned an American artist to prepare a design for a Canadian postage stamp commemorating energy. The artist used a U.S. nuclear reactor to depict our Canadian nuclear industry. How ridiculous, and who is in charge? Where is the economic competence in that bunch of bumber-shooting so-and-so's over there? Nowhere is the government's mishandling of this economy more evident than in its mismanagement of the fishing industry. The policies of the government are crippling our fishing industry on both coasts, and there are many who say it will not be able to recover.
I want to illustrate just how these economic policies of the government and the mismanagement by our so-called fishermen's fisheries minister are hurting the fishermen of Canada. The fisheries policy in this country is not a product of a well-thought-out management plan but, rather, a series of haphazard decisions made on a day by day basis in reaction to political pressures from one group or another.
The high interest rate policy of the government is forcing more and more fishermen into bankruptcy. Last June, when we were discussing the Fisheries Improvement Loans Act, I was hard pressed to understand how the Minister of Fisheries (Mr. LeBlanc) wanted to lend more and more money at preferred interest rates to fishermen when there were not enough fish to be provided for the existing fleet. But at that time, of course, fishermen were a good credit risk and, of course, they were borrowing amounts up to $150,000 at one per cent over prime which meant they could borrow at about 13 per cent.
There are now deficits approaching $.5 billion associated with the capitalization of our fishing fleet. Those moneys now carry an interest charge of some 21 per cent. That is creating a tremendous negative impact upon our fishermen. For example, considering a $100,000 vessel, which is not a large vessel by west coast standards, a fisherman would have to pay some $20,000 or $21,000 interest per year merely to service that debt. To make matters worse, the minister is now forcing fishermen on the west coast to restrict their efforts to catch more and more fish each year.
Unlike other industries in Canada, fishermen cannot increase their effort to compensate for higher expenses. The Fraser River gillnet fleet can attest to this. Many of those fishermen made only a few thousand dollars of take-home pay last year, and the dilemma they face this year, in facing the prospect of losing their homes or their vessels, must be placed
squarely in the lap of the Minister of Fisheries and Oceans and the government's indifferent approach to high interest rates.
As mentioned earlier, this House passed legislation last June which guaranteed a fisherman's loan to a maximum of $150,000 at I per cent over prime. The minister at the time indicated that this program would enable the fishermen to retain their independence so they would not have to look to the big fishing companies for financing. The problem now is that the fishermen cannot obtain financing from the processors because they themselves are in tremendous financial difficulty as a result of the high interest policies of this government. Furthermore, that cheap, chiselling Canadian government is garnisheeing the wages of these fishermen through the fishing companies in order to try to balance their budget when the fishermen are faced with absolute bankruptcy.


Walter David Baker: Shame!


Thomas Edward Siddon: Just recently I received a letter from a constituent of mine who has been a fisherman on the west coast for many years. In April his bank manager informed him that the interest rate on his fisheries improvement loan would be hiked to 19 per cent. Tomorrow, I suppose it will be 21 per cent. I would like to read an excerpt from that letter. My constituent writes:
Just to give you an example of what we are up against, I just completed two weeks fishing on the west coast during which I was able to get out fishing 3'h days and caught a total of 15 fish worth $308.
He could not even pay for his fuel, let alone the interest on his loan!
I cannot fish the inside waters where we could do considerably better this time of year due to new regulations introduced this year. I don't think that I have to repeat to you our problems which all seem to be coming to a head this year and will no doubt result in financial failure of some fishermen.
That letter is not an isolated instance. I receive letters like that every day in my office. So I did some checking, and a few days ago we called the Department of Fisheries and Oceans to obtain some information on just how many fishermen were defaulting on their fisheries improvement loans. I was told by an official of the department that to date there have been some 237 requests to rewrite the terms of the loan; that means, to refinance at higher interest rates and longer pay-out periods. One hundred and eighty-six of those loans were to British Columbia fishermen. Of those 186 provisions, the departmental official estimated that between 10 per cent and 15 per cent of those loans to 18 or 25 fishermen had already been defaulted. They were faced with foreclosure.
That sounded bad enough, but I decided to check with a number of banks and credit unions in the Vancouver area. From these sources, the situation turned out to be much worse than that depicted by fisheries department officials. According to bank contacts in Vancouver, many loans were in arrears, and not only those under the Fisheries Improvement Loans Act; but the banks have decided to carry the fishermen with the hope that the fishing season will improve from last year's disastrous season, and also because fishermen have historically been good credit risks. However, one official indicated to me
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that 85 per cent of his loan portfolio to fishermen on the west coast could be called in on very, very valid grounds tomorrow if he chose to do so. Another official at the British Columbia Central Credit Union estimated that 25 per cent of the B.C. fleet is now in serious financial trouble. If the 1981 fishing season does not show a drastic improvement, that percentage will increase substantially.
What frightens me and many fishermen is that this season cannot be any better than the last because the Minister of Fisheries and Oceans has imposed tough restrictions on the various gear-type fishermen out on the west coast. If this is the case, it is hard to imagine that the banks will continue to extend credit for another year.
The processing industry in this country is not healthy either. For example, one of the largest packing houses in cannery operations in Canada, the B.C. Packers Company, suffered a $14 million loss last year on a capital investment of $200 million. That is a 7 per cent operating loss. At the Fisheries Council of Canada meeting here this week, we learned that the processors are having a difficult time staying in business because in the last two or three years the percentage of the value of fish returned to fishermen has increased from a traditional average of 45 per cent to some 70 per cent. I am not criticizing that. We want to see the fishermen get a greater percentage of the wholesale value of the produced product. But what we have here is the possibility of a compound failure: that fishermen will have their loans called and the companies which will buy their fish will find themselves collapsing as a consequence. I hope I have made my point very clear. This government has to start to move to cut its spending. It is an absolute waste.


Mr. Pierre Deniger (Parliamentary Secretary to Minister of State (Multiculturalism)):: Mr. Speaker, it is always an honour and a great pleasure to take part in such a significant debate on the economy. Among other things, the motion introduced by the official opposition party stresses interest rates and the inflation rate. Keeping in mind the short time allotted to me tonight, Mr. Speaker, I will attempt to review the Canadian economic situation as I see it and to suggest five possible and positive solutions to the Minister of Finance (Mr. MacEachen), particularly with a view to lightening the burden of inflation for small wage earners.
Oliver Wendell Holmes Jr. once wrote that taxes are the price we must pay for a civilized society. Although Mr. Holmes has lost none of his impressive reputation, his principles do appear increasingly less convincing. Indeed, far be it from us to believe that our civilization is worth all that much, particularly in light of the events of these past few days. Mr. Speaker, the interest rates are very high, they have even reached unprecedented levels. Members opposite and government members as well have given us a whole series of examples of the dramatic effects of those soaring interest rates. Mr. The Economy
Speaker, certain members on both sides of the House are even standing on the edge of bankruptcy. In my riding of Laprairie on Montreal's south shore, and that includes the cities of Saint-Lambert, Greenfield Park, LeMoyne, Brossard, Laprairie and Candiac, I went to the trouble of sending a questionnaire to my constituents. Over 5,000 took time out to answer and send me the results. Very telling and very significant they are, those results, because to my first question in which I asked my constituents of Laprairie what they thought was the most important topic-and I listed energy, the economy, constitutional reform, international security and North-South relations-out of those five options 57.3 per cent of respondents picked the economy as being the most pressing subject, whereas among the others energy rallied 14 per cent and constitutional reform 9 per cent. Some 57.3 per cent of the people checked the economy as being their first preoccupation and 20 per cent ranked the economy second among their current concerns. It seems obvious therefore that in my riding just as in the riding of all members, the economy is the subject which draws most interest.
Here is a point I want to bring to your attention, Mr. Speaker, because certain members opposite keep harping on it. I asked the people of the riding of Laprairie whether they thought that a price freeze is necessary. Forty-nine per cent of them replied that a price freeze is necessary, against 35 per cent who said no. Surprisingly enough, Mr. Speaker, when I asked about a wage freeze the results were the exact opposite-35 per cent told me that a wage freeze is necessary whereas 48 per cent said that it is not. Therefore, that reflects a certain confusion, a certain dichotomy which now prevails among people about the economic situation, precisely because they hear so many things that they are really wondering who is speaking the truth and who is not.
Mr. Speaker, interest rates are setting the price of money and the price of money, like the price of any other goods, has never been so high. But let us not forget that interest rates are not set artificially, but rather by the market pressures every Thursday. Today, once again, people got together and bid on treasury bills, resulting in a given rate of interest. The forces at play in the marketplace, at least to my mind, are the very foundation of free enterprise, the society we so heartily hope for, the society hon. members of the opposition claim we do not represent.
Now, Mr. Speaker, this interest rate which is set by the market on a weekly basis has now reached a record high. Of course, opposition members keep reminding us that interest rates are rising, that prices are rising, but they forget a carelessness I am quite willing to overlook to mention that the income of all citizens in the country has grown in the last ten years. Lest I am accused of being insensitive, may I be allowed to remind hon. members, and Canadians who are listening to us, that in the past ten years, prices have increased by 90 per cent while the average income of Canadians has easily exceed-

May 14, 1981
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ed those prices by 100 per cent. The increase is therefore considerably greater than that of prices, and this means that we are clearly richer now than we were ten years ago. The fact remains, however, that we have a high inflation rate, and high unemployment.
The cost of money, Mr. Speaker, whether we like it or not, is directly related to inflation, and inflation is 12.4 per cent higher this year than a year ago; if interest rates were not at a higher level than the rate of inflation, no one then could afford to lend money. Money then would no longer have any value. Naturally, no more money would be available because the money lent would not yield as much income as could be earned by borrowing it. The whole economy would crumble. It has often been suggested, as a solution, that the interest rates be reduced artificially, in such an economic situation, to a rate lower than the inflation rate; but that strikes me as an absolutely irresponsible solution.
There is, of course, the problem of the American prime rate which has now reached 19.5 per cent. If the Canadian rate were to be substantially and artificially reduced while the American rate remained at its current level, certain major investors would obviously be seriously tempted to invest whatever money they have in the United States to obtain a higher rate of return. We often praise the wisdom of those Canadians who, every fall when the new interest rate on treasury bonds is announced, sell the bonds they then hold if the new rate is higher and purchase new bonds at the higher rate.
Mr. Speaker, I am referring to the small Canadian investor who has $1,000 or $2,000 invested in these types of bonds. If this small investor can make such a decision, it is easy to imagine what a major investor would do. If there were such an outflow of capital, there would obviously be less capital to invest, and this would inevitably bring about a devaluation of the Canadian dollar and an increase in inflation. Of course, those who would benefit from this devaluated Canadian dollar would certainly be the representatives of export companies, but as we know, Mr. Speaker, these companies are already in a privileged situation and they are making more money than ever before now that the dollar has reached a low mark of 83 cents. And, of course, those who would suffer would be all of us, who would have to pay more for the goods that we import.
Mr. Speaker, in the situation that I have described, there lurks, of course, a tragedy, the tragedy which now affects the small wage earners. Indeed, Mr. Speaker, the small wage earners are the hardest hit by inflation.
Last April, Mr. Jean Poulin wrote in La Presse that, according to the figures supplied by the Quebec Bureau of Statistics, in that province the purchasing power of those in the higher income brackets was constantly increasing as compared with that of small wage earners.
In 1970, for instance, in the mining sector, the average salary was $149.80. In 1980, this salary had gone up to $446.80, a jump of 198 per cent, from which we must subtract
a general price increase of 92 per cent, and this gives an actual increase in purchasing power of 106 per cent. This is quite good for the mining sector, which has, of course, known an upsurge. In the business sector, the average salary has increased from $101.68 to $244.70, for an increase of 141 per cent. When the 92 per cent for price increases is subtracted, an actual increase in purchasing power of 49 per cent is obtained.
In the services sector, wages have increased from $91 to $225, or by 145 per cent, minus the price increase of 92 per cent, which gives an actual increase of 53 per cent, and I shall pass by other sectors such as finance, manufacturing, transportation and construction, and simply note that those who suffer the most from inflation are the small wage earners because the gap between high and low wages is constantly increasing.
The unfortunate fact which we must try to correct is the impact of inflation on small wage earners who are the hardest hit by any increase in housing and food costs. A person whose earnings exceed $25,000 may more easily face cost of living increases than a person whose earnings fall between $10,000 and $15,000. I have now come to the point in my speech, Mr. Speaker, where I intend to suggest to the minister tangible and positive action to reduce inflation without penalizing the small wage earners.
Mr. Speaker, first we should stop granting salary increases on a percentage basis; second, we should have a new cost of living index based on the margin between the bare necessities of the small wage earner which take up most of those increases and such necessities obviously include transportation, accommodation and food. Let me dwell on those two suggestions. When I talk about salary increases granted not on a percentage basis but on the basis of a certain amount of money, this is what I mean.
If the total increase in the price of those essential items amounted, let us say, to $1,789 in 1981, it would be utterly unrealistic for a Canadian worker to obtain any salary increase short of the minimum amount actually representing the increase in his cost of living because it is clear that if you earn $40,000 and get a 10 per cent increase, the impact will not be the same as if you earned $10,000 and also got a 10 per cent increase, even though in both cases the same percentage is allowed. It is ridiculous. Mr. Speaker, that the small wage earner who is more severely affected by inflation should get a 10 per cent increase, just like the well-paid worker who has plenty of everything. Mr. Speaker, how could we realistically expect to reduce the gap between the haves and the have-nots in this country unless we develop a new formula for granting wage increases. It is not only the small wage earner who should get that through their heads, but also the unions, the unionized workers, the hon. members of this House, the professionals and a great many others.
Concerning the new cost of living index which I have also suggested, I do not think that including as we do now in the index the costs of luxury items such as new cars and houses
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makes any sense. It seems to me that they do not represent everyday expenses. It is clear that the price index is altogether erratic and does not really reflect the facts of life. In other words, Mr. Speaker, wage increases should be granted on a dollar basis and not on a percentage basis, and should be tied to the price increase of essential goods and services. The wage increases would therefore be in line with the price increases of our everyday needs.
The haves, the well-to-do, the rich, the higher-income groups would then have to bear the burden of inflation by paying themselves for the higher cost of goods which, I suggest, they are so to speak the only ones to consume, because the small wage earner cannot afford a new car or a new home, Mr. Speaker. When one compares the standard of living of the low-income groups, the have-nots with that of the haves, Mr. Speaker, one finds an absurd and nonsensical situation.
Such anomalies should be corrected once and for all because it is obvious that under that formula, a 10 per cent increase on a $40,000 salary is twice more inflationary than a 10 per cent hike on a $10,000 salary, and this requires, obviously, a new approach in our labour relations, a new method of having a dialogue between labour and management. But if there is no willingness to make new overtures, we will get nowhere in our society.
A third solution, Mr. Speaker, that I want to bring to the attention of the House has to do with a report on regulatory reform on which I had the opportunity of working. The task force was made up, of course, of both opposition and government members and last December we tabled our findings pursuant to our terms of reference. After several months of hearings, I came to the conclusion, Mr. Speaker, that the people who watch us in this House believe that the size of the government must be reduced and that competition among businesses must be encouraged further.
Mr. Speaker, this is exactly what our report deals with, and in my view this unfortunately has not yet been desired by the government, at least to my satisfaction. After numerous hearings we produced a report in which we submitted some 57 recommendations. We urged the minister to give very careful consideration to these 57 recommendations. He gave that commitment, but we have yet to see the results. Although usually patient, I am more and more anxious that the minister give a positive answer to the 57 recommendations in that report. Other solutions, on which unfortunately I cannot dwell this evening for lack of time, deal with something essential in my view, the reduction of bureaucracy in this country and a formal commitment to increase competition and productivity.
I do not share the view that all of our Crown corporations should be sold. But this is a far cry from getting involved into every economic sector. Unfortunately, and I say this in all frankness, often when the government got involved in some particular segment, that segment experienced a slowdown in activity, productivity declined in some cases, and competition
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suffered because governments have resources that small businesses do not have.
Mr. Speaker, I have proposed this evening five measures that are essential in my view if we are once and for all to tackle positively the problems of inflation. To conclude, let me remind hon. members and all those who are listening today that Canada has no other choice but to fight inflation. Where differences may arise is on the ways of doing this. Hon. members opposite offered some suggestions and we offered others. I for one suggested ways to fight inflation especially as it affects the poorer Canadians, those who are without means as compared to those who are in better financial circumstances. I especially stated the case of the poorer elements of our society because they are the hardest hit by inflation.
Mr. Speaker, I avoided tonight the short-term measures which unfortunately are often proposed in this House by politicians who are more inclined to put forward politically acceptable rather than economically acceptable solutions. There is no easy answer to this problem and the situation will only get worse unless we are prepared today to make the necessary sacrifices. If the Minister of Finance was here tonight I would say to him: Mr. Minister, I would not want your job for anything in the world. But you are doing a great job and you have my support all the way.


Charles James Mayer: Mr. Speaker, the hon. member who preceded me mentioned that if the Minister of Finance (Mr. MacEachen) were here, he would make certain remarks. I am sad that he is not here because I would not tell him that he is doing a good job. Interest rates are running at 20 per cent. We have massive government deficits and massive balance of payments problems. I do not see how anyone in his right mind could tell the Minister of Finance that he is doing a good job. I do not see how any Canadian, whether he be a businessman, engaged in farming or running a household, could tell that minister he is doing a good job. That is one of the problems we have with the economy today.
I spent some time in my riding during the past two or three weeks. I had a chance to talk to the people who make this country productive, those who meet the payrolls and talk to their bankers on a regular basis. A feeling of almost helplessness pervades many of those I spoke to. They have the feeling that nobody knows what they are doing. It is incumbent that all of us stay away from the rhetoric of which the chairman of the finance committee spoke here this afternoon and make some real suggestions to the government to help with this situation.
Many people are very unhappy with what they hear from the economists. It makes one think that nobody understands what is going on in the economy. That is the problem with economists, there are too many fuzzy thinkers today.

May 14, 1981
The Economy
This reminds me of a story, and if I can have your indulgence I will relate it very briefly. This story involves a man who bought a hot air balloon. I think hot air is something that should not be unfamiliar to this chamber. On a Sunday afternoon, this man decided he was going to fly his balloon. He got a friend to go with him. They got out in the country and found a field from which they could fly their balloon. They got it up and got going. During the heat of the day, some clouds developed. They got into the clouds and could not see the ground. They became very concerned about how they were going to manage this balloon. All of a sudden they drifted into a clearing and there was a man down in a field below them. They hollered down to this man: "Where are we?" The man heard them, looked up at the balloon and said: "You are in a balloon". Just then the two balloonists drifted off into the clouds and they could not talk to the man on the ground. The one friend said to the other: "That looked like an economist to me". The other man said: "Why would that look like an economist? I thought it was a farmer out in his field." His friend said: "Who else could give us such accurate, precise and utterly useless information except an economist?"
I think this is what is happening to our economy. Everybody talks about 20 per cent interest rates, they talk about big balance of payments deficits and they talk about billions of dollars that nobody can comprehend. Yet nobody does anything, or appears to be able to do anything, about our economic problems. This is a very sad situation. I think an admonition can be directed in this respect at the Bank of Canada.
We saw the present Governor of the Bank of Canada at the helm of that institution in the 1973-74 period when the money supply increased at the rate of as much as 20 per cent for no apparent reason. I should not say it was for no apparent reason because it was to help finance increased government deficits created by members opposite who then formed the government. We saw the Bank of Canada maintain our dollar at a premium in the 1976-77 period when we had, for no structural or productive reason, a dollar that was overvalued. They kept the value of the dollar high simply by raising interest rates artificially.
I would argue very strongly that we are making a mistake now by using interest rates to regulate the value of our dollar externally. I do not know who decides on this magic figure of 82 cents, 83 cents or 84 cents for our Canadian dollar, but clearly that is what is going on at the weekly auctions every Thursday that take place at the Bank of Canada. We witnessed it today when, for the first time that I am aware of, 90-day treasury bills yielded the same as 180-day treasury bills, that is, 18.73 per cent. Normally there is quite a spread between the close on 90-day bills and the 180-day bills. This indicates there was massive intervention by the Bank of Canada today in that auction.
To my mind that is certainly not a floating interest rate. It is an interest rate that is regulated in terms of keeping the value of the Canadian dollar at a certain level. There are many of us who would sooner see, if that is an option, and I think it is a
real option to some degree, a lower Canadian dollar and, as a result, a lower interest rate. If what I hear from some bankers and some economists is right, when they say they think our dollar is undervalued, there should be no concern about honestly letting the dollar float.
In fact, the real value of the dollar is determined by our international dealings and the demand for our dollars as a result of the ability of our Canadian dollar to buy what Canadians produce. If in fact our Canadian economy is only as productive as a 75-cent dollar, an 80-cent dollar or a 90-cent dollar would indicate, it would seem to me that should be the proper way to determine the value of the Canadian dollar. Let it honestly be determined on the marketplace. To do otherwise is to kid ourselves.
I argued this point in 1976-77 when we kept our dollar artificially at a higher level than it should have been for structural and productive reasons. When the crunch came, we saw the value of our dollar fall lower than it needed to. I believe very strongly that we are making that same kind of mistake today.
The Minister of Finance said in the House yesterday in the course of debate, as reported at page 9532 of Hansard:
If, in the course of debate today and tomorrow, hon. members can bring forward some new, alternative ideas that, because of their validity, would demand immediate implementation, then I would consider doing that very thing.
I would point out to him that many of us in this House have moved motions under Standing Order 43 to refer the very serious interest rate question to the Standing Committee on Finance, Trade and Economic Affairs. I will read into the record again a motion I had the opportunity to propose on Wednesday, April 22, which appears at page 9383 of Hansard. This motion has exactly the same wording as a motion which we accepted when we were the government. It was moved by the now Minister of Industry, Trade and Commerce (Mr. Gray) in October, 1979. If the Minister of Finance is really serious about finding some solutions to high interest rates, I would challenge him to accept the reference to the finance committee that we accepted when we were in government.
The motion is as follows:
That this House immediately order its Standing Committee on Finance, Trade and Economic Affairs to undertake an immediate review of the interest rate policy of this government and the Bank of Canada, and that for this purpose the governor of the bank and the Minister of Finance appear before it to explain their actions and what they will be doing to solve the problems which the governor of the bank himself said, regarding interest rates, are now being caused for individuals and business.
As I said, a similar motion was accepted by our government back in October 1979 when interest rates were in the range of 13 per cent or 14 per cent. Today interest rates are at 20 per cent. If there was an urgency about the matter then, which we as the government found legitimate, certainly that urgency is all the more legitimate now when we see interest rates at the astronomical figure of 20 per cent.
When one sees the Bank of Canada setting bank interest rates at 18.98 per cent it makes one think that very soon we are going to have prime rates in this country at 20 per cent. Most lines of credit for prime borrowers from the bank who
May 14, 1981

operate under this kind of a floating rate, have their interest rates calculated monthly, so that on an annual basis they are operating with an interest rate at over 20 per cent. To me this is an astronomical, a killer figure as far as keeping our economy productive is concerned.
I know 20 minutes is not a long time but I would like very briefly, if I may, to relate some of my remarks to agriculture and the way that industry needs to use credit, and to conclude by offering what I think are some positive suggestions to the government that do not imply or indicate increased government spending.
Briefly, agriculture is a very large user of credit. Not only is it a large user of credit, it is a very important sector of the Canadian economy. It is important, I would argue, for three reasons. A productive agricultural economy is the foundation of any developed country. I am proud to point out again, and proud to be part of the agricultural industry, that Canadian consumers spend as small a percentage of their take-home pay on food as consumers in any other country in the world. We in this country are privileged to be able to feed ourselves on something like 18 per cent of our disposable income. This is on an average; I am not talking about many people who are unfortunately unable to get by on their earnings and spend less than 18 per cent on food. On the average, 18 per cent of our take-home pay is spent on food. That means that over 80 per cent can be spent on other things such as colour TV, paid vacations, and still be able to enjoy short work weeks and many other things we take for granted in this country.
In order to accomplish that, the Canadian agricultural industry over the years has had to become very, very productive. In fact, as an industry it has increased its productivity more than any other sector of our economy. As I said, 1 am proud to be associated with an industry which has that kind of a record.
In addition, over the last number of years not only have we in agriculture been able to lower the amount of the disposable income Canadians spend on food, we have also, at the same time, been able to increase our exports. We as the Canadian agricultural industry, even though we import something like $5 billion worth of food, still export close to $9 billion worth of food. Having regard to the surplus in the balance of payments, the Canadian agricultural industry is responsible for large foreign earnings. This is very important to the Canadian dollar, because as we earn more Canadian dollars, there is less pressure on our Canadian dollar and this helps hold the value of the Canadian dollar at a higher level, and therefore allows the government to get by with lower interest rates.
It seems to me that if the government were serious in some of its long-range economic plans, it should be encouraging this very important part of our Canadian economy, the agricultural industry, to increase its capacity to produce and increase our exports of agricultural products. In the process of doing this, we will be lowering the amount of the disposable income we spend on food, we will also be increasing our foreign earnings and thereby alleviating the serious situation in which we find ourselves today.
The Economy
I also think we have an obligation to the rest of the world. We as Canadians have under our control something like five times more arable land per citizen than any other country in the world.
We have an obligation in that regard to see that we make use of this land as best we can because, as we all know, we as a global entity are not expanding our food production as fast as the world population is growing.
In terms of the Canadian economy, some 10 per cent of our gross national product is produced by the agricultural industry. One out of four, or 25 per cent of the labour force, is involved in some way or another in the agrifood sector of Canada. This gives us an idea of how important agriculture is, not only to the agricultural community but also to the whole economy.
I would like to talk specifically for a minute about the Canadian beef industry. Many of us have come to rely on beef as a staple in our diets. In fact, on average 2.5 per cent of consumer spending is on beef. The beef industry in Canada is a very large user of credit. It has been stated many times before that as interest rates fluctuate on a daily, weekly or monthly basis, the beef industry in Canada is certainly not able to adjust to higher and changing interest rates.
Very briefly, much of the crop which is in the ground now in many parts of the country is being sown with the idea that it should be consumed by livestock. That means that much of the crop which is being sown will not be marketed for a year or even longer. It might not be marketed through livestock for as long as 15 months. When interest rates change, as they have in the past two or three years, producers simply cannot adjust to short-term interest rate changes. It is the planting season in our country and many producers are now in the process of committing themselves to a year or a year and a half production period, and they are committing themselves not to market much of the crop which is going in the ground now until the summer of 1982. They cannot adjust to short-term interest rates. This is a very large problem for many producers.
A feedlot of 500 or 600 head is not a particularly large feedlot, but it could be considered to be of a size sufficient to be a family operation. Many operators of feedlots of this size are now paying as much as $100 in interest a day. Farmers are met with many uncertainties. They meet uncertainties with respect to weather conditions, rainfall, hail, disease and many other things, but most farmers would agree that the biggest uncertainty they face is government decisions. One of the government decisions over which producers have no control whatsoever is with respect to what interest rates will be. Rather than go through that kind of uncertainty, this year many farmers will choose not to produce at all. With interest rates at the 20 per cent level, one cannot do very much but agree with them. That is one of the very real problems we have now.
The Governor of the Bank of Canada has said many times that monetary policy, or raising or lowering interest rates, and

May 14, 1981
The Economy
regulating the supply of money is only one factor in fighting inflation. He is fighting it from the demand side by trying to slow down the rate at which people borrow and thereby slow down the inflationary expectations people in this country have. But when we have a 20 per cent interest rate, I argue very strongly that that hurts more on the supply side than it helps on the demand side because, as the example I have just given illustrates, an interest rate of 20 per cent chases people out of the beef industry and thereby puts less beef on the consumer's plate over the next year or year and a half. That will drive prices up drastically because there will not be as much beef available. The supposed cure we are being fed by this government and the Bank of Canada, namely, high interest rates, will actually do more damage on the supply side and thereby make inflation worse. This is something the government fails to realize. That is why many people are becoming very sick and tired of some of the fuzzy ideas and statistics we are being fed. It is time many of us took a look at the real situation in the real world. The real situation is not found in this chamber, and certainly not in offices where paper is shuffled. The real world is out where the real production goes on in this country.
I will give the House another example. Many people have pointed out that in the northern hemisphere we have six months of winter and six months to get ready for it. In many areas of this country that means when you raise cows, you spend half of the year feeding them. That is a direct cost. When interest rates are at 20 per cent, by far the biggest cost of maintaining a cow in western Canada is the interest cost. That cost is greater than the cost of feeding that animal for six months of the year.
We find ourselves in an absolutely ludicrous position. Let us not kid ourselves into thinking that high interest rates will help reduce inflation, when actually they are driving out the very basic business we need in this country, and that is food production.
To quote some figures, last year Canadian farmers paid some $1.5 billion in interest. This year the estimate is that they could pay as much as $2 billion in interest. That is an increase of roughly one third over last year's interest costs. We all know that last year's interest costs were very high. According to the figures I have here, the cost of money has increased two and a half times faster than the cost of any other commodity with which a farmer has to work. It is one factor to have that cost go up, but to have it go up, not to be able to calculate it in terms of budgeting and to have it increase in an unpredictable fashion is even worse. As I said previously, the biggest variable with which any of us in the agricultural community work is the variable which is associated with government because there really is no rhyme or reason for some of the things governments do.
I have five suggestions to make to the government. If the Minister of Finance is serious about what he said yesterday in question period, I challenge him to take some of the suggestions I am about to make extremely seriously. My first suggestion is to make the small business development bond available to unincorporated businesses and to make it available for
purposes other than the very limited capital items for which it is now available. I will elaborate on that, if I might. As we all know, the small business development bond has limitations to it. It is limited to $500,000. You can only have it once, and it is limited now to incorporated businesses. Its rate is set over a period of five years. It is a fixed rate, and it is set at half the prime rate plus whatever one can negotiate with the bank, usually between 1 per cent and 2 per cent. At present, if we have a 20 per cent prime rate and if we take half of that, that would be 10 per cent. If we added, let us say, 1.5 per cent, we would be looking at 11.5 per cent as opposed to 20 per cent. That certainly is a very significant reduction in the interest rate. The beauty of this small business development bond concept to me is, first, that administratively we do not create a large bureaucracy. All we have is a very small number of people over in the Department of Finance approving these bonds as they come in. They look at them to see that they fit the categories defined-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. gentleman, but his allotted time has expired.


John Leslie Evans: Mr. Speaker, I am almost sorry Your Honour had to interrupt the hon. member for Portage-Marquette (Mr. Mayer) because as a general rule he makes a great deal of sense, and I enjoy listening to him because he has productive and useful things to say about the problems we discuss. I was very happy that in advance of this particular discussion he was able to come over and talk to us about some of the things he was going to say tonight.


Mr. Scott (Hamilton-Wentworth):: Mr. Speaker, I rise on a point of order. I understand that my colleague, the hon. member for Portage-Marquette (Mr. Mayer) had only two more minutes to go in order to complete his wise remarks. I wonder if the hon. member for Ottawa Centre (Mr. Evans) would yield to the hon. member-


The Acting Speaker (Mr. Ethier):: Order, please. There seems to be a disposition to accord extra time for the hon. member for Portage-Marquette (Mr. Mayer).


Some hon. Members:: Agreed.


Charles James Mayer: Thank you very much, Mr. Speaker, and I appreciate the indulgence of the House. I did not realize my time went so quickly.
To put it briefly, the small business development bond should be "liberalized," if I can use that word. I think everyone opposite would agree with that.
Second, the Canadian Wheat Board initial payments should be set as high as possible. The Canadian Wheat Board is able to borrow at prime minus one-quarter per cent. When we have high interest rates, cash flow becomes almost as important as price. The government should encourage the Canadian Wheat Board to set initial payments as high as possible. The minister currently responsible for the Canadian Wheat Board decided
May 14, 1981

not to announce initial prices until after seeding is completed. I think that was a mistake.
Third, the Agricultural Stabilization Act is the law of the land. We all know that there will be a pay-out to hog producers this year. That pay-out should be made as quickly as possible. Can hon. members believe that we are a year behind in some of those payments? If use of the Agricultural Stabilization Act could be made with respect to the hog industry, or whatever industry it is to apply to this year, as quickly as possible, that would assist producers significantly with their cash flows.
Fourth, I suggest we have fixed financing for livestock and other farming operations so that a person who has to feed cattle for six months or a year could go into a bank and instead of having his loan rate float, he could fix his interest rate for the productive period of that enterprise, just as is done now for a house mortgage.
There should also be some other way of rationing credit. For instance, at the moment I can get a loan to go to Florida cheaper than I can get a loan to buy a tractor. That is not right. It is a misuse of credit.
Finally, in my opinion, the structure of the Bank of Canada should be changed to have at least two elected members from this House sitting on the bank's board of directors. The Bank of Canada has more to do with fiscal policy than we think it has. That is the basis of our whole parliamentary system to have elected members oversee fiscal affairs. I would argue very strongly that having elected members on the board of directors of the Bank of Canada would be very beneficial to us in the long run.
I thank the House again for its indulgence in allowing me some extra time.


John Leslie Evans: Mr. Speaker, I was very happy to relinquish some time to the hon. member for Portage-Marquette so that his recommendations could be put on the record. I can assure him that I will look at them very carefully and so will the minister.
Yesterday I spoke on the motion specifically dealing with interest rates and I tried to deal with the fundamental factors that were underlying the current level of interest rates, why interest rates are where they are and what factors determine interest rates.
Tonight I want to expand into the relationship between interest rates, the economy and economic growth and what the government has done about these things. Today we have heard some criticism of the government's economic policy. Some members from the opposition indicated that the federal government has no consistent economic policy. That is simply not correct. The federal government does have an economic policy which is consistent and, given the appropriate time taken for economic policy to take effect, the government's policy will be effective. It will yield the kinds of results that we all want to have, which are lower unemployment, higher economic
The Economy
growth, greater job creation, going along with lower unemployment, lower rates of inflation and thereby lower rates of interest.
The government's economic policy has three basic thrusts to it. These were laid out in the budget speech which was presented by the Minister of Finance (Mr. MacEachen). The first major thrust of the government's budgetary and economic policy was to restrain government spending. Hon. members opposite may say that was not a serious proposition put forward by the Minister of Finance, but it was a very serious proposition. In fact, we have done better than was forecast in the budget of last October.
The second major thrust of the budget and the government's policy is the reordering of the government's priorities in expenditures toward greater expenditures in the areas of economic development, industrial readjustment and job creation. There have been a number of programs introduced in the area of job creation by the Minister of Employment and Immigration (Mr. Axworthy). The other day, the Minister of Industry, Trade and Commerce (Mr. Gray) laid out in his speech a very comprehensive framework within which he will be constructing, along with the rest of the cabinet, his industrial policy for Canada. There is a great amount of hope in that framework because it is very comprehensive and one which promises to be workable and to move Canada in the direction we all want it to move. Specifically, Canada has greater manufacturing capability, more growth and more job creation in areas that will enable Canada to have a real economic and industrial future.
The final thrust of the government's economic and budgetary policy is the thrust toward reducing the rate of inflation through a monetary policy which deals with the fundamentals giving rise to inflation.
We have heard members of the official opposition and members of the New Democratic Party calling for a new budget not only today but previously. But let us look at the facts. Let us look at the situation which has arisen subsequent to last October's budget. When I spoke during the budget debate, I spoke strongly in support of the Minister of Finance. Events, I think, will prove that we were right in supporting the Minister of Finance in that budget because it was a good budget and it is working.
Since last October what have we seen? Take the fourth quarter of 1980, at the beginning of which the budget was introduced. In that fourth quarter and in the remaining 19801981 fiscal year, the minister forecast growth rates in the economy and he forecast unemployment rates. The minister talked about job creation and housing starts as well. All of those things outlined in the budget were relatively pessimistic. The outlook was not the way we would have liked to have seen it. But everything was presented very forthrightly in the budget by the Minister of Finance. What has happened subsequently? The events which have transpired since then have laid bare the criticism of the opposition. This criticism still arises today, even flying in the face of what has happened over the last six months in Canada. I ask again, what have we seen over the last six months?

May 14, 1981
The Economy
In the fourth quarter of 1980 we had an annualized growth rate of 8 per cent. In the first quarter of 1981, we have an annualized growth rate, because the figures are not yet finalized, of between 4 per cent and 6 per cent. Those are very high growth rates by Canadian standards, and they are very high growth rates by world standards. In other words, we have had a very strong record of economic growth in the last six months, much above what was forecast in the budget of October 28.
Let me ask what has happened with regard to unemployment. The Minister of Finance put forward a pessimistic outlook with regard to employment. But instead, as the minister pointed out, for the month of April we had the lowest unemployment rate we have had in the last five years. We have a seasonally adjusted unemployment rate of 7 per cent. What did the budget forecast? It forecast unemployment to be over 8 per cent. Therefore, we have done much better than what was forecast in the budget, both in economic growth and in the area of unemployment. Part of that is as a result of how much better we have done in the area of job creation than the budget forecast. As both the Minister of Employment and Immigration, and the Minister of Finance mentioned, we have created 346,000 jobs in the last twelve months. We have seen employment in Canada grow by 3.3 per cent. That is the highest rate of growth of employment of any country in the industrialized world bar none. In the area of job creation, Canada has consistently had the highest rate of job growth over the last ten years. That pattern is continuing. The government is committed to creating jobs and to giving opportunities to Canadians. It is committed to providing the kind of environment in which the private sector can create opportunities for Canadians as well. The proof is right there in the facts, not in the rhetoric of the opposition but in the facts. The facts are there.
Let us look at housing starts. We do have a situation in Canada in which lower-income Canadians are having difficulty if they wish to buy a house. But to say that the housing market is in a shambles is not facing the facts. Housing starts are well above 240,000 units a year, which is in the upper range of what Canadians have historically experienced in past years. The housing market, as far as new construction is concerned, is picking up. It is booming.
We could go on and on and look at statistics in other areas. I would like to focus on the budget itself and on the government's commitment to fiscal restraint, to restraint of government expenditure and to a reduction of the deficit and financial requirements. Today the hon. member for York-Peel (Mr. Stevens) and other opposition members told us that in fact government spending is out of control, that the deficit and financial requirements are out of control, and that the government is putting excessive pressures on the financial markets. If we look at the budget figures and what was projected in it, we will see that a reduction was projected in the rate of growth of federal government expenditures. Also there was projected a reduction over time of the deficit and, of course, a reduction in financial requirements which is the amount the federal government must borrow in capital markets.
The facts are that we have done appreciably better than what was forecast in the budget. We have not done worse, we have done better. In fiscal year 1980-81 which just finished, expenditures are $300 million less than were forecast in the budget. The budget deficit has been reduced by over $1.4 billion which is below what was forecast in the budget. The financial requirements in 1980-81 were $1.8 billion less than forecast in the budget.


Henry Perrin Beatty: Forecast!


John Leslie Evans: I hear the hon. member opposite. In fact, when the budget was introduced, we heard from hon. members opposite that the federal government was fooling people, that the estimates were low and were not realistic. They suggested that we would do far worse than was projected, that those were illusory numbers and far below what the government would achieve. In fact, we have done appreciably better than what we forecast in the budget, yet they were called unrealistic numbers by members of the opposition. This clearly indicates the commitment of the Minister of Finance and the government to the two major thrusts which I indicated regarding the budget: restraining government spending and reordering priorities in the government toward economic development, growth, job creation and industrial adjustment. The commitment is there. The programs are coming forward. The job will be done, and it will be done with fiscal responsibility.
In the last two days most of the attention has been focused on the area of interest rates. Sometimes it is very difficult for individual members of Parliament, who deal with very real and pressing problems of constituents, to see beyond those individual problems to the broader macroproblem. I am referring to the problem of how to reorder the economic situation to make the over-all economic situation better for all Canadians. As is often the case, the way to solve the problem for all Canadians is not by trying to solve the problems of every individual Canadian. In some cases we must try to see the forest as well as the trees. This is the case with regard to inflation.
Today the Right Hon. Leader of the Opposition (Mr. Clark) indicated that the way to solve our problem was to bring in expenditure programs to subsidize Canadians who were being adversely affected by high interest rates. All Canadians who borrow, irrespective of whether they are farmers, fishermen, foresters, small businessmen, home owners, or consumers who may want to buy, for example, new cars to drive to work, are adversely affected by high interest rates. Should we bring in a special program to assist one group? For example, if we are to bring in a program to assist farmers, why would we bring in a special expenditure program to assist them in coping with the very real difficulties they face with high interest rates and not do the same thing for fishermen, home owners or small businessmen?
Today the Right Hon. Leader of the Opposition suggested a program to introduce a mortgage interest and property tax credit. If we look at the 1979 budget of the hon. member for
May 14, 1981

St, John's West (Mr. Crosbie) and ask ourselves how much that program would cost annually when fully implemented, we would be looking at a program which would cost over $2.5 billion per year. If we talk about an energy tax credit, we are talking about half a billion dollars to $1 billion per year. If we brought in an expenditure program to assist all groups which have, justifiably, been identified by hon. members opposite as well as by members on this side of the House, and we say that all of these groups affected by the present high interest rate situation should be subsidized by the federal government, we would find that the only way to do it would be to give way on the expenditure restraint, on the commitment to reduce the deficit, and on the commitment to bring inflation under control. If we give way on the fight against inflation, we will not have lower interest rates; they will be higher. Inflation causes interest rates to be what they are; it is not the other way around. If inflation is at 13 per cent or 14 per cent, the interest rates will be 18 per cent or 19 per cent. If the inflation rate is 20 per cent or 22 per cent, the interest rates will be 25 per cent to 27 per cent.


Some hon. Members:: Oh, oh!


John Leslie Evans: If we looked at the inflation rate in the state of Israel and its interest rates, if we looked at the inflation rate in Brazil and its interest rates, we would see that inflation determines interest rates.


William James Kempling: I cannot believe this.


John Leslie Evans: If the country is to prosper in the future, above all else, we must bring the rate of inflation under control. By doing so, we will bring interest rates under control, we will continue the economic growth of the last six months, continue the job creation of the last six months, and continue the housing starts of the last six months.


William James Kempling: You could not run a peanut stand; you would go bankrupt.


John Leslie Evans: Some people have told us that the Governor of the Bank of Canada is following the wrong policy. As I indicated last night-


William James Kempling: It was the same garbage.


John Leslie Evans: Obviously I am speaking the truth and it is hurting hon. members of the opposition because they are coming alive. In fact, the official whip of the opposition has never been more animated for a man of his size; it is quite something.
As I indicated last night, the prime factor in the interest rates we face today is the rate of inflation. It is the prime determining factor of interest rates. The second factor is the transition phase through which we are going in bringing inflation under control. It involves a reduction in the growth rate in the money supply. If the Bank of Canada reduces the growth rate in the money supply, it means the real funds available for borrowing in capital markets are reduced, but at the same time we are facing increasing demands on capital
The Economy
markets for lending funds. So there is an increasing demand for credit at the same time as we are trying to restrain the supply of available funds in order to bring inflation under control. This is causing pressure on interest rates. Also, as I mentioned last night, the last factor is the high rates in the United States which lead to cash flows in and out of Canada as interest rates fluctuate. If our rates drop significantly below the United States rates, funds will flow out. This will mean lower amounts of lending funds in Canada, which means the supply of funds will diminish and, for a given demand, interest rates will go up or the dollar will drop. Some hon. members have said that we should let the dollar drop. We import at the present time 25 per cent to 30 per cent of our gross national product. If we allow the dollar to drop dramatically from its current level, and if we are really concerned about inflation, we should think about the impact of a dramatic drop in the value of the dollar on the inflation rate when 25 per cent to 30 per cent of the cost of what we import immediately rises by exactly the amount of the drop in the dollar. We are talking about food and energy. We are talking about manufactured products and about a great many services and goods which Canadians buy every day in the marketplace. That is not a solution because by dropping the dollar you immediately feed inflation. When you feed inflation, you do not lead the country to lower interest rates. In fact, you lead the country to higher interest rates in the short term. We cannot allow a declining dollar policy. We cannot let inflation go. We cannot follow expenditure programs which will be inflationary and which will lead to increased government expenditures, because that will be inflationary. Inflationary policies like that will not lead to lower interest rates. They will lead to higher interest rates in the very near future. The best solution to our problem is the government policy which is firmly set to do three things: reduce inflation, reduce government deficits in the growth of expenditures and reflect government spending and-


The Acting Speaker (Mr. Ethier):: I regret to interrupt the hon. member, but the time allotted to him has expired.


Ian Deans: Mr. Speaker, I must say that I listened with interest to the Parliamentary Secretary to the Minister of Finance (Mr. Evans). He certainly does paint a glowing and wonderful picture, does he not?


Miss MacDonald:: Marvellous.


Ian Deans: I returned from Hamilton on the weekend and I wish to share with the parliamentary secretary something which might just dampen his enthusiasm ever so slightly. I had discussions with a number of young families who at the end of this month will not be able to renew their mortgages. I say to the parliamentary secretary that all of your statistics and all of your grand pronouncements pale into insignificance when you look at the effect of this government's policies on people who go out every day and work for a living, who at the end of the year find that the wages they earn have not kept pace with the cost of living. They find that the wages they worked so hard to

May 14, 1981
The Economy
earn do not allow them to refinance the house they purchased five years ago. I want to put this to the parliamentary secretary: Statistics be damned! I am sick and tired of hearing government members talking about the statistical benefits which flow from this policy which is being pursued, and which is creating great hardships for so many Canadians in every part of this country in almost every walk of life. I find it extremely difficult to contain the anger I feel when 1 look around the country and when I speak to the people whom each of us in this House supposedly represents. I find that these people are being put into difficult financial positions and that the government shrugs and says "Well, statistics tell us that things are better; we can look forward to happy days." I expect the band to strike up "Happy Days are Here Again" any moment.
Fortunately, or unfortunately, there are those of us who take a look not only at what is written down in a statistical sense but who look at the impact of what has happened. When I was preparing my comments for this evening, I thought I would take a moment to review some of the comments which have been made by other members of the house of Commons in other days about the events of the day. I will take but a moment to do that because I think it is important. I want to say to you, Mr. Speaker, that I find this whole debate frustrating. I find it frustrating because on either side of the House- and I am sure the hon. member for Kingston and The Islands (Miss MacDonald) will forgive me for saying this-I hear a great deal being said. But when I look at the record of events which have taken place over the course of the last few years I can juxtapose the two. I can put the official opposition back in government and the government back in the official opposition. I can hear exactly the same statements being made. A year ago, on October 26, 1979, the headlines read "High rates 'crucifying' Crosbie concedes". Another headline read "Cros-bie backs interest hike". Another said "Will keep interest up to beat inflation: PCs". There is another unbelievable one which reads: "We live in tough times: Crosbie". Another reads "Time to tough it out Tories warn Canada as inflation mounts". I think to myself, is it not strange, there they were in government saying exactly the same things that the government of today is saying about the conditions which exist today. I will give the Conservatives credit, things were not as bad then as they are now. Things were not as bad for the people of Canada at that time as they are now.
The interesting thing is that while the hon. member for St. John's West (Mr. Crosbie) and others were saying these things on the other side of the House, when the government was in opposition, we had the hon. member for Windsor West (Mr. Gray), who is now Minister of Industry, Trade and Commerce, saying:
-in view of the professed desire of the government to see domestic oil prices rise quickly to world levels, are not the acting minister and his government in fact telling the Canadian people that their policy is to have this country move into a recession?
He then goes on to say:
How can the government continue to justify supporting a policy of following American interest rates so closely, to what are record levels in Canada, when the
soundness of the basis of the American policy has been called into question by U.S. experts? Why does the government not act now to prevent our economy from becoming another Three-Mile Island?
There he was in all his splendour in opposition yapping and yipping about what was going on. Then he gets put into government, and what happens? Things get worse.
Then there was the then leader of the opposition, who is now Prime Minister (Mr. Trudeau), suggesting that the prime minister of the day, the hon. member for Yellowhead (Mr. Clark) was accepting the record high interest rates without doing anything about it. We saw the Minister of Employment and Immigration (Mr. Axworthy) first quoting the then minister of finance saying:
These people are being crucified with an 11 Zi per cent mortgage rate-
Those are the words of the then minister of finance. Last week they were being crucified with an 18 per cent mortgage rate. At the time of the 11 xh per cent mortgage rate, the hon. member for Winnipeg-Fort Garry (Mr. Axworthy) said:
Would the minister make the judgment now that, as a result of his policies and his government's policies we have the mortgage rate going up to 14'/2 per cent, the people of Canada are not being crucified but are being drawn and quartered-
Where is the consistency? I could go on and on. It is embarrassing to read these items. I am surprised that members on both sides are not offended and quitting en masse over the positions which they have put forward in the House over the course of the last two years. Then the government has the nerve to get up and tell us, through the parliamentary secretary, that things are getting better.
Let us take a look at how good things are for a moment. I do not know whether the statistics are new or, for that matter, of any interest, because I doubt very much if anything much will happen in the next year. However, let me tell you that the consumer price index has gone up, since March of 1977, by 37.4 per cent. The automobile price index has gone up by 49.1 per cent in the same period. The gasoline prices in Canada have gone up by 75.4 per cent. The prime rate has gone up 140 per cent plus between 1977 and 1981.
It is interesting to note, though, that not everyone was suffering while this was going on because, of course, the profits of the five major banks went up 76 per cent from 1977 to 1980. That was while all of these very high and onerous costs were being borne by the Canadian public. The assets of the five major banks went up by 96 per cent from 1977 through 1980. While that was going on, bankruptcies rose in Canada between 1977 and 1980 by 65 per cent. So on the one hand we are getting higher and higher costs, and on the other hand we are getting wages which are not keeping pace with the inflation level and are falling behind by 1 per cent or 2 per cent a year. The banks are making ever increasing profit margins. People in business and private individuals across this country are losing their businesses and their homes, and yet we are told that things are getting better.
May 14, 1981

From March of 1980 to March of 1981 bankruptcies in this country have gone up by 29 per cent, and this government sits and twiddles its thumbs and tells us that good things are about to happen. What about those people who have already lost? Who speaks for them? What about the families which cannot find homes to live in because they cannot afford to pay the cost? Who speaks for them? How do we compensate them when things get better? what do we say to them when they have lost $10,000 which they have saved over the course of many years because they could not meet the onerous and usurious rates being charged by the banks? Do we go and apologize, send them a get well card or a sympathy card perhaps? Do we tell them that we are really sorry we did not do anything about it, that it is unfortunate and it is just one of the facts of life? "The statistics are good, so do not feel badly about it. The fact that you have lost everything, we cannot do anything about that." We are just going to sit back and hope that somehow, by some magical, mystical means, inaction will resolve the problem. I do not think inaction can resolve the problem. I have said many times in this House that we have reached a critical point for many Canadian families. We reached it, in fact, about a year ago.
As my leader said yesterday and again today, there are more than a thousand families in Canada which at the end of this month will have to walk away from their homes because they cannot refinance them at the current interest rates. No one can tell me that it is impossible for us in the House of Commons to do something about a situation which has been allowed to occur over the course of successive Liberal and Tory governments since 1975. No one can tell me that it is impossible for us to find a way to bring interest rates down to a level-at least for those home owners who are faced with exorbitant rates today-which can be managed within the income levels of the majority of people. No one can tell me that we must simply sit back and watch while people are left to their own devices, while people walk away and leave their homes or lose their businesses and, perhaps, in the process, lose their homes because they have to go out and mortgage them to keep their businesses going, at a time when the Royal Bank increased its profits between 1977 and 1980 by 94 per cent.
No one can tell me that it is reasonable and fair that the farmer who can no longer make enough money to pay the mortgage will have to leave his farm and go bankrupt, at a time when the Bank of Montreal increased its profits between 1977 to 1980 by 115 per cent. No one can tell me that it is a reasonable thing. We should take a look at the people in this country who are struggling to maintain an economy which is being allowed to be undermined by outside influences, people who cannot get wages which will keep pace with the cost of living. No one can tell me that such a situation is reasonable while the Bank of Nova Scotia has increased its profits between 1977 and 1980 by almost 69 per cent. No one can tell me that the manager of the Toronto-Dominion Bank should have reason to expect an increase of 82 per cent in profits at the same time as he looks families straight in the eye in his
The Economy
office and says, "We cannot renew your mortgage because we have to charge more than you can afford."
Is that the kind of economy and is that the kind of system we live in? Is that what has become of Canada? Is that the level we are at in the House of Commons that we can find no way to rechannel some of that excess profit to provide mortgages for people at a price that they can afford? Is that the level to which we have fallen in the country? Is it now reasonable, is it acceptable, that some should be able to get a usurious return while others are forced out of their homes? Is that the level Canada has reached? I wonder. I wonder, and the government sits and tells me that, according to statistical analyses, things are getting better. Things are getting better! I dwell on the subject of banks because they are, in fact, the beneficiaries of all of this; but they are not the only beneficiaries. I want to make it clear that I understand that for large business there is a much better opportunity for absorbing the higher interest rates because they have access to money that small businesses or individual farmers do not. However, I want to say that I dwell on the subject of banks because we must start there.
It is impossible for a small business to carry the inventory necessary to remain in business at the kind of bridge financing costs that they now face. It is impossible, and we now know that. Do we do anything about it? No, we wring our hands and we walk away and say that statistically, things are getting better. But while we are walking away and while my relative is leaving his small business because it is impossible for him to survive-and I suspect that is true of the relatives and friends of others in the House-the Royal Bank has increased its assets by 79 per cent between 1977 and 1980. That is an increase in assets. However, while the farmer whom I know, who has been struggling for a number of years just to keep his head above water, working his heart out, trying to make sure that he maintains the family farm in order to provide the food that we have to eat, is putting off the purchase of machinery because he cannot afford the additional cost which is levied as the result of high interest rates, the Bank of Montreal increases its assets by the enormous amount of 110 per cent between 1977 and 1980.
I could go on with it because the Bank of Nova Scotia increased its profits by 100 per cent; the Imperial Bank of Commerce, by 85 per cent; the Toronto-Dominion Bank, by 91 per cent. We are not all suffering. We are not all suffering at all. I want to suggest that this House of Commons is not here to protect the banking interest. It is here to make it reasonable to do business in Canada. It is here for the purpose of writing laws which allow people to make reasonable profits. It is here also to represent the views of the 23-plus million Canadians who live in every part of this country and who, today, are asking, begging-they should be demanding-that we stop this nonsense and get on with dealing with what is fundamentally wrong with this economy.

May 14, 1981
The Economy
If it is true that the level of the Canadian dollar must fall, then the level of the Canadian dollar must fall! If the outcome of that is that imported products are more expensive, so be it. It is entirely possible, in fact it is probable, that Canadians might then buy Canadian-made products. This would increase the level of productivity and use up that 20-plus per cent of unused capacity that exists in Canada today and it would put more people to work and generate more goods.
When I asked a question today, the hon. member for Willowdale (Mr. Peterson) asked me, "Where is the market?" Mr. Speaker, there are markets and there are ways to do this. I say to the government and to the official opposition and to anyone else who cares to listen, that they will not be able to fulfil their mandate or meet their obligation to the people of Canada if they continue to allow the very soul of this nation to be undermined.
That soul is being undermined as a result of the difficulties that families now face when trying to meet even the minimal commitments that they have. It is an up-hill battle, which they are losing.
I suggest to the government that it stop this preoccupation with the level of the Canadian dollar and if need be, as my leader said earlier today, and as we have said a number of times-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his time has expired.


Flora Isabel MacDonald: Mr. Speaker, I regret that there is such a short time left to say the things I would like to say in a debate of this nature which deals with the government's shoddy economic performance at this time.
I was interested in the remarks of the Parliamentary Secretary to the Minister of Finance (Mr. Evans). He has learned well from the master. He knows how to take a lesson from the Minister of Finance (Mr. MacEachen). He does not have to be taught anything more. The Minister of Finance and the parliamentary secretary, and indeed, everyone who sits on the government benches, do not seem to care or to know what is happening to the hundreds and thousands of people across this country who are suffering day after day from the government's policies of high interest rates. They do not seem to know or care that there are a lot of people in this country who are in real need.
The Parliamentary Secretary to the Minister of Finance said that there are times that you have to forget about the trees and think only of the forest. He implied that they cannot afford to think of the individuals who are being hurt. I want to tell him that after you knock down all trees, there is no forest left. That is what we have to think about.
The Minister of Finance made some fatuous promises before the last election in an effort to be re-elected. As the result of those promises, the country is suffering now. Of course, the minister does not give that very much consideration. Safely out
of sight in the inner sanctum of the Department of Finance he can play with all sorts of ideas, many of which will bring further distress to Canadians. Remote as he is from real life, he can move from consideration of higher interest rates, which he has already forecast, to the introduction of wage and price controls or to the consideration of a tax-based incomes policy. He can do that while he is safely secluded in the penthouse of Place Bell Canada.
The minister has emerged from his quarters briefly to ask for suggestions. I want to give him one or two in the short time available to me. His comments of the last few days have shown how remote he is from the suffering that is going on across the country.
I want to suggest to the Minister of Finance that while he is contemplating which of the many complicated levers he will pull, he should set up a human misery index-something similar to the consumer price index-which he could read daily so that he could be aware of the hardship he has inflicted on Canadians. I could tell him that he will not be able to read that kind of index from some beach in Hawaii or from Kuwait, but he will be able to read it if he goes across the country talking to business people, farmers, and people living on fixed incomes in one community after the other.
Just the other day the minister accused us of pretending to be sympathetic to the plight of these people. There is no need to pretend about the suffering that is going on at the present time, Mr. Speaker. People are worried, upset, concerned and increasingly anxious. I want to give the minister an example of what is happening and of the kind of difficulties that Canadians find themselves in. I want to tell him about the case of one couple-one of many in my constituency-who have spoken to me. These people have been in the hotel business for a number of years. They worked hard and put their whole lives into it. Two years ago they decided to expand their business and do what many people in Kingston and The Islands have done, restore their building to its original form. They borrowed $650,000 from their friendly bank. The interest rate they obtained at that time was about 12 per cent; last week they were being charged 21 per cent. Their weekly interest payment is $3,000. The irony is that they are now taking in more money than they ever have in the history of their business, but they cannot meet their payments or do the things they want to do. They are being forced into bankruptcy. When they make their weekly deposit, the first thing the bank does is to take off the interest payment. They can meet that interest payment and the salaries of some 40 people but that is all. The cheques to their suppliers are being sent back marked "not sufficient funds".
Last week a cheque came back to them from Revenue Canada for $5,000. To add insult to injury, a $300 penalty was imposed by the very government that put them in this predicament in the first place because of high interest rates. They had applied for a small business development bond some five months ago but their application still has not been processed. They are still being hurt, week after week, by the government's high interest policies.
May 14, 1981

The other day I mentioned the mental anguish that people are suffering, and the minister laughed at me. It is that kind of mental anguish that this couple in Kingston is suffering. They are going through it because they do not know where the money will come from to pay their staff in the weeks ahead. They do not know whether they will have to lay them off and thus add another 40 people to the number of unemployed in this country. They do not know how they will be able to escape foreclosure or bankruptcy. They would rate very high on a human misery index if the minister were aware of what is happening to human beings in this country.
That is one suggestion that the minister could take into consideration and see if he cannot respond to the suffering that is going on in this country.


The Acting Speaker (Mr. Ethier):: Order, please. It being ten o'clock, it is my duty to inform the House that, pursuant to Standing Order 58(11), proceedings on the motion have expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Douglas Grinslade Lewis: Mr. Speaker, in replying to a question on Tuesday of this week put by the hon. member for Kingston and the Islands (Miss MacDonald), the Minister of Finance (Mr. MacEachen) indicated his confusion and ignorance of what is involved in applying to renew a mortgage. My colleague asked if the minister would honour his commitment to assist home owners who are having difficulty with the soaring interest rates. This commitment was made in March, 1980. The minister replied:
-because of the appreciation in the value of their homes they had experienced they were able to bear the burden of these increased mortgage payments. That is the fact.
Because an estimated 500,000 Canadians are renewing their mortgages at crippling interest rates, I sought to clarify the minister's statement on their behalf later in the question period. I suggested that when a Canadian home owner sits down with a mortgage officer and tells him that his home has appreciated, the mortgage officer is simply going to say "so have your mortgage payments". I would ask the minister how appreciation in the value of a home helps the Canadian home owner who has to make out-of-pocket mortgage payments. The minister replied:
Adjournment Debate
-if that is too complicated a concept for the hon. member to understand, I should like to draw his attention to a simpler concept-
The rest of his comments were nothing more than subterfuge, camouflage and confusion to cover the fact that he had no knowledge of the problem. Five hundred thousand Canadians are faced with increased mortgage payments as they renew their mortgages this year. Many are selling or abandoning their homes because they cannot afford the increased payment. A $40,000 mortgage loan at 10 per cent taken out in 1976 could be carried at $360 a month based upon a 25-year amortization. It now costs $590 a month to amortize $40,000 over 25 years at today's Liberal interest rates of 18 per cent. That is an increase of 61 per cent.
It is shocking that this crisis is facing the country. It is even more shocking that a minister of the Crown would confuse the Canadian people and then have the gall to suggest that the concept was too difficult for me to understand. For that reason I want to explain the facts of life to the Minister of Finance.
When a home appreciates in value, the home owner's equity increases. The home has become more valuable, but it does not put any more money in the home owner's pocket unless the house is sold. It does not mean that the mortgage principal is reduced. That can only be done by monthly payments which reduce the principal gradually, made out of the take-home pay of the home owner.
When home owners go to renew their mortgages, the mortgage officer considers the value of the home as security for the loan. If the home has appreciated, well and good. If it has depreciated, the mortgage officer must consider if the value is sufficient security to support the loan. However, the mortgage payments, usually monthly, on the renewed mortgage are another matter. The home owner must prove to the satisfaction of the mortgage officer that he, she or they can meet those payments out of their income or what we call take-home pay.
The point we were making is that increases in the mortgage interest rate from 10 per cent in 1976 to the current rate of 18 per cent as a result of the Liberal party's high interest rate policy result in an increase in the payment the home owner is making on a mortgage. If they can meet the payment, fine. If they cannot meet the payment, the home owner is in difficulty. The security, that is the increase in value which the minister thinks helps, goes by the board because the mortgage officer is only interested in how the home owner is going to make the payment. The mortgage company is then free to demand payment of the principal in full and the home owner seeks a mortgage elsewhere. It is absolute nonsense to suggest that appreciation in value helps to meet mortgage payments. It is unfair to the minister to hold out this hope to Canadian home owners.
I was tempted to pursue this matter as a question of privilege since the minister impugned my integrity and ability as a lawyer who practised real estate law for 11 years before entering politics by suggesting it was too complicated a matter for me to understand. Then I realized that the minister just did

May 14, 1981
Adjournment Debate
not understand what was involved in renewing a mortgage. The minister is an embarrassment to the government. That concept was too complicated for him. I feel the minister will want to admit his error through his parliamentary secretary and apologize to the House and the Canadian people, and I hope his parliamentary secretary will have the dignity and integrity to do so on his behalf. Thank you very much.


John Leslie Evans: Mr. Speaker, dealing with this problem of mortgage renewals, which is a very real problem, the hon. member for Simcoe North (Mr. Lewis) certainly has made a case. The Minister of Finance (Mr. MacEachen) does not disagree with him one iota in respect of the problem and the fact that there is a problem. I think where the disagreement lies is in the extent of the problem and whether that problem can be coped with by the average Canadian home owner.
The majority of Canadian home owners renewing mortgages this year took out their mortgages in 1976. The average mortgage interest rate in 1976 was 11.8 per cent, or from 11 per cent to 12 per cent, and the current interest rate is about 18 per cent. This has resulted in an average increase in mortgage payments of some 40 per cent for those people who are renewing their mortgages. At the same time we have to ask whether they are able to meet these increased payments. We have shown here an unfortunate increase of 40 per cent in the payments necessary to service those mortgages.
However, in that same time period the average annual wage has increased by 55 per cent, some 15 percentage points more than the increase in the mortgage payments. The home owner is certainly not spending on average a greater proportion of his or her income on mortgage payments in 1981 than he did in 1976 when the mortgage was originally taken out.
At the same time it should be noted that the average house price has increased by some 48 per cent over the price paid in 1976. The hon. member for Simcoe North indicates that the minister did not understand when he said it was a complex problem, and perhaps the hon. member did not understand. In fact that is true because many of the people he is concerned about, and about whom we are concerned, are the lower income Canadians who bought homes at very high loan-to-val-ue ratios in 1976 and did so by not only taking out a first mortgage at 11.8 per cent, but a second mortgage at perhaps 14 per cent, and in some cases a third mortgage. Housing prices have gone up by 48 per cent, which means that the individual who had a first mortgage, a second mortgage, and, perhaps, in some cases a third mortgage in 1976, will be able to consolidate all those in a first mortgage. As a result, the figure I have given here, the 40 per cent increase, overstates the effect on the people we are concerned about here because a second mortgage at 13 per cent or 14 per cent would mean that payments were higher than indicated by an 11.8 per cent mortgage rate.
The fact of the matter is that the minister made an indication to the hon. member for Simcoe North, and the minister was right.


VETERANS AFFAIRS-I. REQUEST FOR ALLOCATION OF ADDITIONAL FUNDS. 2. PREPARATION OF AMENDING LEGISLATION
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, I directed a question yesterday to the Minister of Finance (Mr. MacEachen) with regard to veterans' legislation. My question was as follows:
In light of the effect that new consumer price increases, rising energy prices and interest rates have on veterans and their families, as welt as the fact that over 2,000 applicants are having to wait up to two years for their pension appeals to be processed, will the Minister of Finance tell this House when he will be allocating the necessary funds so that the Minister of Veterans Affairs can bring in a bill providing some financial relief for veterans and their widows at this time of unprecedented need?
I received no assurance whatsoever from the Minister of Finance.
I posed a supplementary question which was answered by the parliamentary secretary to the acting minister of veterans affairs. Part of my question was the following:
There has been much speculation that legislation is now being prepared which would lower the phasing-in period for widows whose husbands were in receipt of less than a 48 per cent disability pension.
I received the assurance that this legislation will be brought in soon.
I also asked the government to launch an immediate inquiry into this backlog of 2,000 veteran pension applications which are taking up to two years to process. I called this a national disgrace, and I will call it a national disgrace again tonight.
The parliamentary secretary informed me that there are not 2,000 applications but approximately 1,200 applications in process. There is a conflict here. The Royal Canadian Legion has been keeping very close tabs on this. The legion is not in the habit of printing false information or exaggerated figures. I want to read from an editorial in the legion's magazine for May of 1981 which states:
In November, 1978, the chairman of the pension commission told a meeting of the standing committee on veterans affairs that the average length of time for a first application to reach a decision was 6 months, an improvement on the 7.8 months taken earlier. It was ... "almost back to normal."
It was stated at that time.
However, the average 7 months taken for a claim or 3'/2 months for a widow in December, 1979-
These are the commission's own statistics.
-has now climbed to more than 11 and 7 months respectively. A few cases will illustrate: 1. A May, 1980, request for a pension medical re-examination was completed July 30, 1980. The pertinent reports had not reached the commission's head office by February, 1981; the district office was awaiting additional information about the pensioned conditions. 2. An application for attendance allowance was submitted July 25, 1980, and acknowledged in September. The commission's request for investigation went forward to the medical examiner October 31,1980.
The veteran died in February.
I have statistics here for the last number of years which show that hundreds of veterans died before their pensions were processed. The legion's article also points out the following:
May 14, 1981

The number of appeals awaiting consideration by the pension review board hovers around 2,000. Now being heard are applications made two years ago. And the number of new appeals is increasing.
I suggest to the minister that he spend some time over at the Department of Veterans Affairs tracing some of these applications to find out why they are taking two years to be processed. I repeat again that this is an absolute disgrace.
The Royal Canadian Legion, Ontario Command helps many veterans with their applications. That command wrote to veterans and told them not to expect any action in a couple of months but that they will have to wait two years. This is the advice the Ontario Command gives to veterans in Ontario:
An assessment board, which due to several factors, will not be held any sooner than twelve to fourteen months, will only consider your condition as it was at the time of the Pension Medical Examination that the ruling was given for. In other words, when a board hears the claim it will be considering a ruling that by that time will be probably two years old.
That length of time is not acceptable, and we have heard nothing but excuses over the last number of years in this respect. The time has come for an end to excuses and for the minister to get over to that department and to find out what is going on there. I have in my hand a list of statistics respecting veterans who are dying before they receive their pension increases.
I have a letter here dated May 11, 1981, from Mr. J. Lamy, who is the dominion secretary of the Royal Canadian Legion. He points out in his letter:
-the delays in pension adjudications are of the utmost concern to us at this time.
Later in the paragraph, he says:
The situation is particularly bad in respect of first applications-
Further on in his letter he says:
We plan to present a brief to the standing committee-
I might say, whenever that is called.
I was very disappointed to read a speech which the parliamentary secretary gave recently to veterans in Peterborough in which I found some misleading information. The parliamentary secretary told the veterans in Peterborough the following:
It is a special pleasure to appear here and be able to assert that the federal government over the past year has improved the economic circumstances of many thousands of veterans and their survivors.
There are 2,000 veterans who have to wait two years to have their applications processed. Some are dying before the process is completed and their widows are having a rough time because of inflation, with the cost of gas having gone up 54 cents a gallon, and all the rest of it. I am sure hon. members know all the statistics, but then the parliamentary secretary tells them their economic lot is improving. That is not very good information to be handing out to veterans' organizations.


Mr. John Campbell (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, it is unfortunate the House rules only allow me three minutes to respond to the distorted allegations made by the hon. member. However, I want to
Adjournment Debate
thank the hon. member for Winnipeg-Assiniboine (Mr. McKenzie) for giving me the opportunity to clarify the situation respecting the delays and adjudications of applications for disability pensions made under the Pension Act.
There has been considerable talk recently about cases awaiting decisions. It is unfortunate but we must realize that the Pension Commission is unable to deal with all the applications it receives as soon as it would like. There have been some problems besetting the commission, and every effort is made to overcome them as quickly as possible.
At the first decision level, the commission has about 4,200 applications on hand. These cannot all be called backlog, some having been received only a few days ago. Because of the nature of the claims and the investigative work which must be done, it has never taken less than an average of five and a half months to deal with them. About 2,200 of these claims are less than five months old. The suggestion that there are 2,000 claims which will take two years to process, is simply not true.
The chairman of the commission has told me that their oldest claims at the first level are 21 months old and that there are only two in that category, and in both those cases they are waiting for information from another country.
Progress is being made in the time taken to process these applications. It now takes almost two months less on the average than it did at the end of 1980.
As far as the second level is concerned, that of the entitlement board appeal, the situation now is better than at any time in the commission's history. There are fewer than 900 cases to be heard across the country, in which the claimants have advised that they are ready to proceed, and the commission hears about 300 a month. This is less than half the number waiting to be heard a year ago.
In so far as proportionate pensions for widows are concerned, I believe it is well known that one of the acting minister's personal priorities is to try to improve the phasing-in time for widows of pensioners who, under present legislation, will have to wait for lengthy periods to receive their benefits. His success in this area will no doubt depend on the over-all financial picture.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time of three minutes has expired.


Mr. Campbell (LaSalle):: May I ask for unanimous consent to continue, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: Order, please. That is one request which cannot be allowed at this time.


ROYAL CANADIAN MOUNTED POLICE-QUERY RESPECTING LEGISLATION AND COLLECTIVE BARGAINING RIGHTS
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, I rise to pursue a question which I asked of the Solicitor General (Mr. Kaplan) on March 31, 1981, relating to the denial of the

May 14, 1981
Adjournment Debate
fundamental right to collective bargaining for members of the RCMP in Canada. At that time the Solicitor General indicated that amendments to the RCMP Act would be brought forward "soon". He stated that as far as most members of the force were concerned, there was a very effective system in effect for dealing with industrial relations within the force.
In the few minutes I have this evening, I would like to point out that the minister promised on many occasions to bring forward this important piece of legislation affecting members of the RCMP right across the country. In the Speech from the Throne, there was a promise that the RCMP legislation would be amended. In May of 1980, the minister agreed that the present disciplinary procedures were unfair. He said that legislation was a high priority and would be brought forward very soon. He repeated that promise on a number of occasions. In the fall of 1980, he stated that legislation would be brought forward within a month. Again on February 23, 1981, in Edmonton the Solicitor General stated that this legislation was a priority for the government and that it would be brought forward within a month. We see very clearly that on many occasions the minister promised to bring forward this important legislation, but to this day we have not seen any results whatsoever.
Perhaps this reflects the lack of clout of the minister in cabinet. One could only hope that in the very near future members of the RCMP would at long last have an adequate mechanism set out in the RCMP Act.
There are several concerns of the force, but the fundamental one is its right to full collective bargaining without the right to strike. They recognize that the right to strike is one they do not wish to receive at this point. They are prepared to have differences settled by arbitration. The right to full collective bargaining and freedom of association should be accorded to members of the RCMP.
In my question on March 31,1 pointed out that the freedom of association supposedly granted to all Canadians under the charter of rights in fact is denied to members of the RCMP. On other occasions I have noted in the House that that same freedom of association is denied to employees of Parliament, including members of the security staff on the Hill. What is the effect of this denial of collective bargaining rights? This has meant that the conditions of members of the RCMP in terms of pay and their relative standard has been falling further and further behind. It is the only major police force in Canada which does not have collective bargaining rights. The pay and working conditions of the RCMP have been steadily declining.
The Solicitor General said that there is a system of divisional representatives. Members of the force acknowledge that this simply is not working. The divisional representatives must represent literally hundreds of members and cannot bargain on pay. The bargaining process for pay is a mystery. What the Treasury Board is prepared to offer and what senior members of the force are seeking are mysteries. There is no recognition of the increased costs facing members of the force in certain areas of the country such as my own area in British Columbia.
One effect of this is that senior members are leaving the force and are being replaced by recruits. Of course this has a very serious impact, particularly in areas such as Burnaby and Surrey which are training detachments.
A number of other concerns face the force at this point. They include the fact that the multimillion dollar pension scheme has no significant involvement of members of the force. Surely this must be changed. They are concerned about certain aspects of working conditions. They believe they need improved weapons and ammunition. They are concerned that soft body armour should be issued as well. They are disturbed at the arbitrary dismissal of their request for night sticks by the commissioner's office. They insist that the vacancies which presently occur in a number of detachments-vacant staff positions which result in staff shortages-jeopardize in some cases the safety not only of members of the RCMP but of members of the public. They insist these vacancies must be filled.
It is clear the government has failed to live up to its commitment to members of the RCMP. It took a recent court decision in the federal court to permit members of the RCMP to be represented in disciplinary proceedings by a lawyer. This was a court proceeding initiated by the association of 17 divisions. It was not until that decision-and I understand fortunately the decision is not being appealed-that this fundamental right to counsel was accorded to members of the RCMP in internal disciplinary proceedings.
The concern that I wish to raise this evening, and which I have raised on other occasions, is that the level of frustration within the RCMP is steadily increasing as their pay falls further and further behind. As I said, they want the right to full collective bargaining, a right which is accorded to all other major police forces in Canada. The Solicitor General has refused to act on this right. We will be looking with great interest at the proposed legislation with regard to the RCMP to ensure that it does accord the right to collective bargaining.
To conclude, we will be pursuing the matters which I have raised, including vacancies in various detachments, the concern about the pension plan and working conditions and, most important, the widening gulf in pay as compared with other police forces.


Hon. Bob Kaplan (Solicitor General):: Mr. Speaker, I was glad to note from the concluding remarks of the hon. member for Burnaby (Mr. Robinson) that he retains the faith that the RCMP bill will be forthcoming. In fact, I had hoped that it would long since have been tabled in the House. I can tell the House that I am still working on that legislation. It is still very much in the works and I hope it will be tabled very soon.


Svend Johannes Robinson: You have been saying that for a year.


Robert Phillip Kaplan: I concede that. I had hoped that I would have been able to bring it forward some time ago. It has not been a
May 14, 1981

matter of clout but a matter of other legislation before the House and other legislation which is in the hands of legislative draftsmen. But the way is now clear for moving it forward. Today I saw material associated with the legislation. I do not claim full responsibility for the long delay which has taken place since the Marin commission in 1976 made the recommendations which led to the commitment of the government to introduce legislation. The Marin commission recommended an improved procedure for complaints from the public and, of equal importance, more formal grievance procedures for individual members of the force. This will permit individual members of the force the right to counsel, and many other advantages in their industrial relations with the force and issues of discipline which are long overdue.
1 am glad that the hon. member acknowledges that this legislation will be coming. I hope he will be happy with it. But the legislation will not change, as he indicated he hoped it might, the right to collective bargaining. As the hon. member
Adjournment Debate
put it, there is no fundamental right to full collective bargaining in Canadian society. That is a right which Parliament has accorded within the public service. It is something the Pearson government did. It is not a right which has been extended to all units of the public service, as the hon. member indicated. It was not accorded to the Armed Forces, the RCMP, the staff of the House of Commons or to others. He can consult the debates at that time and the discussions in committee for all of the reasons put forward for not according this collective bargaining right. I think the reasons were good ones and they still apply. I refute his claim that he speaks for the force when he says that there is a broadly-based feeling that there should be the right to collective bargaining. There is a divisional representation system which is an effective one.


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

Friday, May 15, 1981