1981-02-02

ROUTINE PROCEEDINGS


Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, I rise under the provisions of Standing Order 43 to propose a motion of urgent and pressing necessity. In view of the widespread complaints being registered about unscrupulous insulation contractors who are taking advantage of the CHIP program to defraud both the federal government and home owners, I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That installers of insulation under the CHIP program be required to conform to the stringent standards of safety and quality including the minimum R-value rating, material restrictions, mandatory fire-stops, attic vents, electrical fixture shields and vapour barriers and that the minister responsible be hereby instructed to enter immediately into an agreement which would empower municipal building inspectors to certify all installations as a condition of approval of payment to any contractor from CHIP program funds.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXCISE TAX
Mr. Gordon Taylor (Bow River):: Madam Speaker, under the provisions of Standing Order 43 I rise to present a motion of urgent and pressing necessity. Whereas price increases of natural gas drastically affect chemical and fertilizer prices which promote more summerfallow and less extensive use of land, which means less production, lower dollar return, less machinery purchased and fewer manufactured goods used, all of which tighten the cost-price squeeze on Canadian farmers and affect adversely almost every other industry in Canada, I move, seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That this House recommends strongly to the government that the natural gas excise tax be rescinded at the earliest possible time; and failing this complete cancellation of the excise tax, that the excise tax at least be cancelled where the gas is used in any form of agricultural production.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH CARE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, in view of the fact that at this particular time the province of Ontario is experiencing a strike in its health care system brought on by the financial starvation of the provincial health care system through mindless, callous restraints on the part of the government of Ontario, I move, seconded by the hon. member for Broadview-Greenwood (Mr. Rae):
That the federal government, in renegotiating the Established Programs Financing Act, put the health of Canadians first by (1) not negotiating with a view to compounding the errors of various provincial governments by trying to cut back on their own contributions to health care; and (2) assure this House that they will not act unilaterally at any time to reduce their contribution to health care.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Eymard Corbin (Madawaska-Victoria):: Madam
Speaker, under Standing Order 43 I should like to move a motion on a matter of urgent and pressing necessity. In view of the fact that the National Farm Products Marketing Council, in its December 15, 1980, report on potatoes made public today by the Minister of Agriculture, refers in a most serious manner to the occurrence of questionable marketing practices, that these are widespread, and that fear of reprisal prevented many producers from speaking at the public meetings which

February 2, 1981
were held, I move, seconded by the hon. member for North-umberland-Miramichi (Mr. Dionne):
That the federal government establish immediately a commission of inquiry into all aspects of potato production and marketing in Canada, as it promised to do during the February, 1980, election campaign.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


REGIONAL ECONOMIC EXPANSION
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, pursuant to the provisions of Standing Order 43 I seek the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
Considering the demonstrations and the revolt which occurred over the weekend in Quebec's Matapedia valley, and considering that the Minister of Regional Economic Expansion (Mr. De Bane) seems unable to forget his personal rivalry with Quebec minister Berube, I move, seconded by the hon. member for Okanagan-Similkameen (Mr. King):
That the House give the minister one week to settle the conflict, otherwise he should be transferred to other duties where he will not have to deal with the government of Quebec.


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


Some hon. Members:: No.


BANKRUPTCIES
Mr. Peter Elzinga (Pembina):: Madam Speaker, 1 rise under the provisions of Standing Order 43. In view of the fact that total bankruptcies in Canada are up 17.3 per cent in 1980 as compared to 1979, as reported by the Department of Consumer and Corporate Affairs, and in view of the fact that individual bankruptcies are up 23.4 per cent and business failures up 28.9 per cent from a year earlier I move, seconded by the hon. member for Athabasca (Mr. Shields):
That this House condemns the government for its failure to show compassionate consideration to those many Canadians facing bankruptcy because of this Liberal government's lack of a comprehensive economic policy, in its recent budget, to deal with record high interest rates, record high unemployment, and record high inflation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, in accordance with the provisions of Standing Order 43 and to follow up on the motion of my colleague across the way who raised the question of the potato marketing agency report, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House calls on the Minister of Agriculture to receive the report of the National Farm Products Marketing Council on the establishment of an eastern Canadian potato marketing agency with respect, and to introduce legislation to establish a national Canadian potato marketing commission with supply management powers so that we can proceed to put in place a proper solution to the problems of the potato industry.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion. It appears that the province of Quebec has reneged on the terms of the James Bay and Northern Quebec Native Claims Settlement Act resulting in 6,500 Crees of the James Bay territory being virtually without medical services since October last. The act clearly states that, in the event of inconsistency or conflict, the federal government under the terms of the Indian Act is to resume responsibility for medical care to the Cree people. No such aid has been forthcoming. A number of Cree children died last summer due to an epidemic of gastroenteritis. The recommendations of an investigating team of scientists have not been implemented and thus we can expect more deaths in the near future. Therefore I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That this House instructs the chairman of the Standing Committee on Indian Affairs and Northern Development to seek immediately a reference that will enable the said standing committee to investigate this disgraceful and unacceptable situation before more children needlessly die.
February 2, 1981


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Madam Speaker, under the provisions of Standing Order 43, I rise on an urgent matter respecting our Canadian beef cattle industry. In view of the government's decision, announced by the Minister of Agriculture (Mr. Whelan) and the Minister of Industry, Trade and Commerce (Mr. Gray) last December 31, that no Canadian beef import quotas would be in place for 1981, and, further, in view of current heavy imports of U.S. fat cattle at 6,000 to 7,000 head per week, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That the Minister of Agriculture take immediate steps to have his meat importation bill, C-46, introduced for a quick second reading debate and referral to the Standing Committee on Agriculture, so that a proper debate on beef imports can take place as a necessary step to the establishment of Canada's first meat importation act.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, I rise today on a matter of urgent and pressing necessity. In view of the strike into Mozambique carried out by the South African government on Friday, January 30, which resulted in the deaths of eight persons, and considering the stated intention of the South African government to follow up its raid on Mozambique with continued attacks on neighbouring countries, I move, seconded by the hon. member for Regina East (Mr. de Jong):
That this House condemn South Africa's act of aggression against Mozambique, which constitutes a violation of the territorial integrity of a sovereign and independent state; and call upon the South African government to cease immediately such attacks on neighbouring states, which destabilize the entire southern African region and promote a situation of war.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Bill Domm (Peterborough):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. The Minister of Industry, Trade and Commerce (Mr. Gray) has finally announced that Downsview is to get the new Dash-8 assembly plant. No matter how surprised 20 other cities were that they lost out to the three cabinet ministers from the York region, it came as no surprise to Peterborough. We have observed pork-barrelling before with Parks Canada and Eldorado Nuclear Limited, both going to the ridings of Liberal cabinet ministers in Cornwall and Blind River. I move, seconded by the hon. member for Durham-Northumberland (Mr. Lawrence):
That this government stop listening to the needs of its own cabinet ministers only and recognize that there are regions of the country other than those represented by Liberal cabinet ministers and Liberal members that warrant the attention of this government.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Prime Minister. He will recall that on June 25 last, outside No. 10 Downing Street in Britain, he was asked:
So Mrs. Thatcher in fact said there would be no problems under any circumstances in giving British consent to patriation?
The Prime Minister of Canada replied:
She didn't say that and I didn't ask her to say that.
Could the Prime Minister of Canada tell us whether the House of Commons can accept as the truth his statement of June 25?
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February 2, 1981
Oral Questions


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I have the transcript. May I just reread the question:
So Mrs. Thatcher in fact said there would be no problems under any circumstances in giving British consent to patriation?


Mr. McKinnon:: Read it all.


Pierre Elliott Trudeau: Well, the Leader of the Opposition just read it all. I want to know what I said Mrs. Thatcher said. It is not customary, when I afterwards meet the press in a scrum, to go into any details about what transpired in a discussion between two Prime Ministers or two heads of government. I was following this line at that point. I was following it in agreement with the British Prime Minister, that we would not get into details on this question. That is the reason why, when 1 came out from Downing Street, I did not go into any details. 1 put my customary brave front on by saying that the package was so good that the provinces would agree, that I was a Liberal, I was optimistic and I was confident that this whole thing would go through. This is what I told the press.
I have since indicated that in the private meeting-and in this I am not purporting to speak for Mrs. Thatcher, I am speaking for myself-I made it clear to her that we would be proceeding with or without the consent of all the provinces.


Charles Joseph Clark: Madam Speaker, if the Prime Minister emerging from a meeting with another Prime Minister wants to say "no comment", he says "no comment". What this Prime Minister said was that the Prime Minister of Great Britain did not say there would be no problems under any circumstances and that he did not ask her to say that. That was his statement on June 25. We now have a different version of the truth here in the House of Commons today. The Prime Minister, again referring to the transcript of his remarks when he did not say "no comment" but answered specifically, according to documents released by his office, was asked the question:
Do you think that there could be any difficulty in Westminster if the Canadian provinces and the federal government themselves are still at odds over the situation?
The Prime Minister of Canada replied to that question by saying:
Well, that's a hypothesis that I didn't ask her to examine-
He said quite explicitly that he did not ask her to examine that hypothesis. He also said quite explicitly, "I don't believe she did examine it". Can we accept as being the truth that statement by the Prime Minister of Canada on June 25?


Pierre Elliott Trudeau: Madam Speaker, I can only ask the Leader of the Opposition to read on, where I said after the words he quoted:
I assured her that next September 1 will be meeting the premiers after a full summer of work and that we hope to come either in the fall or later in the course of the next year with proposals which, I hope, are a final recourse to the British Parliament to end this situation ... I'm optimistic about that and 1 didn't ask her to speculate on any other hypothesis.
I was saying then what 1 have always said for the past ten years, that I hope to proceed without opposition from the
provinces, that I hope to have a consensus. That is why in the past ten years we have never moved to Great Britain, because we did not have the unanimous support of the provinces.
I was still saying that publicly in June to the press and to others because I did not want to make it obvious then that we were not hopeful about consensus, that we were determined to go even if the consensus did not exist. This is what I was saying publicly to the press in scrums and in press conferences.
1 repeat, this is what I have been saying for the past ten years.
1 was saying I was a Liberal, that I was optimistic, that I was hopeful in the course of the summer the Minister of Justice and his opposite numbers would put the piece together. That is what I was saying publicly.
Privately, I have told the House that I warned Mrs. Thatcher that we had never had unanimity for 53 years and it was possible, indeed quite likely because we had a separatist government leading one province, that we would not get unanimity. I stand on that, Madam Speaker. I can only say that until Mrs. Thatcher is prepared to say the contrary, and my word must stand. If she says she will not comment because she will not reveal a confidence, I hereby authorize her to say the contrary, if it is true.
The House has been told, and I repeat it today, that I told her there would likely not be unanimity and I did not know if there would be full consent of the provinces, but that we would come nonetheless in September or at some point in the course of the following session. I recognized when I talked to the press that I was still putting on perhaps the show of hoping against all hope that, in spite of 53 years of failure to get unanimity, perhaps we would get it this summer.


Charles Joseph Clark: Madam Speaker, the Prime Minister calls it a "show." Other people would call it other things when someone says one thing publicly and a different thing privately, which is what the Prime Minister has done.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister has made it clear, at least in public, that he did not ask the Prime Minister of Great Britain to examine the hypothesis of there being disagreement in Canada which, of course, was what resulted. Let me ask the Prime Minister a question about an apparent attempt at clarification that occurred. Can he tell us whether there has ever been a written request by the Canadian government to the government at Westminster to clarify in writing how Westminster would proceed with a joint resolution on the Constitution from Canada and, if there was such a written request, will the Prime Minister tell us both when the request was made and the reply was received, and will the Prime Minister table the written request and the written reply so that this House of Commons and the whole country will know if the reply was limited to assurances that the joint resolution would simply be presented, not passed, to the Parliament at Westminster?
February 2, 1981


Pierre Elliott Trudeau: Madam Speaker, as to the introduction to the question by the Leader of the Opposition, he reproaches me for saying one thing privately and another publicly. I ask him and the House, in fairness, what would the reaction of the provinces and the Leader of the Opposition have been had I come out of a meeting with the British Prime Minister and said: "We will act whether the provinces agree or not"? He knows very well-


An hon. Member:: That's what you are doing anyway.


Pierre Elliott Trudeau: -they would have said it was a provocation; there they are already in June saying our Minister of Justice wiil fail, and so on. I said publicly what I hope still to be the case, that there would be an agreement between the provinces. I repeat, I did not say publicly-and even with hindsight I do not think it would have been wise to say so-that indeed we had speculated on the fact that some provinces might disagree with the package, because then I am sure we would have had howls from the premiers and howls from the Leader of the Opposition, as he has howled before, Madam Speaker, at what he called provocation of the premiers when we announced in advance that maybe success will not take place.
In so far as his question about the written request is concerned, I confess I do not remember any such written request. I will check my memory and with my officials to see if there has been a written request to that effect to the British Prime Minister or to any previous British prime ministers. I do know that I would not even ask for that. I just said that we would take it as required that if they get a request from the Canadian Parliament they will have no choice but to act.


An hon. Member:: And the reply?


Pierre Elliott Trudeau: The reply was that she agreed with that.


Charles Joseph Clark: Without extending this too long, Madam Speaker, I think in terms of preface the Prime Minister of Canada should follow one rule, and that is that the Prime Minister of Canada should tell the truth. That is the rule that should be followed.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, as to the question of any communication 1 ask the Prime Minister also to check with his Secretary of State for External Affairs, who said yesterday that such a letter had been received. I refer to a request made and a letter in reply received from Westminster. What I now want to have from the Prime Minister is an assurance that, once the Secretary of State for External Affairs is proved to have been stating the truth yesterday in his television interview, that letter and any written request occasioning that response will be tabled here in the House of Commons so that everyone will know all of the truth and all of the nuances which existed in that exchange of correspondence.
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, the Leader of the Opposition asked if we had made a request in writing and had received a reply, and I said I could not remember any. Now the Leader of the Opposition is asking something else. He is referring to a letter to which the Secretary of State for External Affairs referred. It was a letter from the British Prime Minister. In it she said in essence what every British minister has said-and what the Prime Minister herself has said since the beginning-that the trouble was with the timing, not with the substance, and that they had no doubt that with a request from the Canadian Parliament they would have no choice but to put it through. She did say, as I told the House Friday, that the ministers had been told in September or October that with a charter in the package it would be more difficult. That was the position the British Prime Minister took.


Charles Joseph Clark: Will you table it?


DATE OF PREVIOUS DISCUSSIONS WITH BRITISH MINISTER
Hon. Jake Epp (Provencher):: Madam Speaker, my questions are also addressed to the Right Hon. Prime Minister. In view of the statements he has just made regarding the exchange of correspondence, I request that he table that correspondence.
I would like to ask the Right Hon. Prime Minister on what date or dates he last met personally with any member of the British cabinet, at which meeting, or meetings, Canadian constitutional matters were discussed. Who was the minister, or ministers, he met with, and where?


An hon. Member:: Order paper.


Pierre Elliott Trudeau: Madam Speaker, I could not give the exact date from memory. If the hon. member had given me notice I would have been able to tell him, but I believe it was some time in December. It might have been late November, but I think it was some time in December, and the minister in question was the then minister of defence, Mr. Pym.


Arthur Jacob (Jake) Epp: Madam Speaker, that is the meeting to which I am referring, the meeting which took place on December 19, 1980. At the meeting of December 19, 1980, in Canada between the Right Hon. Prime Minister and the Right Hon. Francis Pym, did the Prime Minister express to Mr. Pym the extreme concern in Canada about proceeding with the constitutional resolution as planned by the government?


Pierre Elliott Trudeau: Madam Speaker, once again I want to point out to the House that it is not customary for me or, I hope, any of my interlocutories, to give details of conversations held in private between a head of government and another head of government or important minister on a visit to Canada.
I regret that this has resulted in some lack of candour in discussing afterwards with the press what took place in the case of Downing street. I would like to take the same attitude

February 2, 1981
Oral Questions
with regard to the meeting 1 had with Mr. Pym in December. 1 am prepared to break this rule if the House forces me to, as was the case with respect to my discussion with Mrs. Thatcher.
I do not think it is proper. 1 think that if the British government had any doubts about the course of action we are taking, they would have told us that they would not pass the resolution if it contained this, that or the next thing, but that they would pass it if it contained something else. I personally do not think that would be a proper attitude for the British government.
That is also the way that the present British Prime Minister thinks and the previous British prime minister thought, and that is why it seems to me that, so far as we are concerned, the matter is now settled. The British have told us that they would receive a request from the Canadian Parliament and that they would act on it; that if the package contained certain things, it would take a little more time. But there was never any question that they would look through the resolution to see if it was well founded, justified or acceptable to them.


NATIVE RIGHTS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, in the absence of the Minister of Indian Affairs and Northern Development, my question is directed to the Prime Minister. On October 31, 1978, the government signed an agreement with the Committee for Original Peoples Entitlement to settle Inuvialuit land claims. In the January 16, 1981, edition of News of the North, the Minister of Indian Affairs and Northern Development is quoted as having stated in a letter of December 24 to the federal government's chief negotiator that;
-some parts of the agreement-in-principle, signed between the Committee for Original Peoples Entitlement (COPE) and the government, are not acceptable to cabinet and must be changed before a final agreement can be reached.
It seems that this government intends to repeat-


Some hon. Members:: Question.


James Douglas Manly: -the awful mistakes of the past. Does the government intend to honour the agreement with COPE of October 31, 1978, and has any agreement been reached by cabinet to renege on the provisions of the agreement?


Pierre Elliott Trudeau: Madam Speaker, I apologize but, not having been briefed on this question, I do not have the answer. However, I will be happy to transmit the question to the minister, who is on his way back from his home in Hamilton.


James Douglas Manly: Surely, Madam Speaker, the Prime Minister would be aware of the decisions which had been reached in cabinet on that question.
Can the Prime Minister tell us what priority he and his cabinet colleagues place on the settlement of land claims, and could he tell us how the Government of Canada can expect to negotiate and settle the other outstanding land claims in the territories if they reneged on the only agreement that they have reached thus far?


Pierre Elliott Trudeau: The hon. member asks how intent we are on solving this problem. I think the intent is clear from the indication given by the Minister of Justice on Friday before the parliamentary committee that he would be prepared to entrench aboriginal rights. We are therefore giving the guarantee that it is our intention that these matters be settled, we hope by political negotiation or, if not, by the courts.


James Douglas Manly: We certainly hope that the commitment to entrench aboriginal rights will not be taken away by any amending formula, Madam Speaker.


Some hon. Members:: Hear, hear!


James Douglas Manly: On Friday, the hon. member for Cariboo-Chil-cotin raised the question of the James Bay agreement and the reneging by the governments with regard to the health care provisions. I ask the Prime Minister: Is the federal government prepared to stand by the James Bay agreement and to respect article 14 of that agreement to ensure that the James Bay Cree have adequate health care?


Pierre Elliott Trudeau: I do not have article 14 at hand right now, therefore I cannot give a precise answer, but I can assure the hon. member that our government played a large part in the negotiation of the James Bay settlement. The then minister of Indian affairs and northern development, who is now Minister of Justice, had a hand in it and had one of his special assistants sit in at the negotiations on his behalf. Therefore, I can only say that what we have negotiated was successful and we intend to see that the undertakings are carried out.


THE CONSTITUTION
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, I am sure that the Prime Minister must appreciate that, with the lack of candour to which he referred earlier-


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: -and in respect of the one-sided version of what actually went on in the past, we have not been informed of all that took place. I should like to get back to the meeting which the Prime Minister had with the British minister, the Right Hon. Francis Pym, on December 19, along with other ministers of the Canadian cabinet. I should like to ask the Right Hon. Prime Minister whether Mr. Pym informed any minister of the Canadian government that it was only on October 6 of last year that the British Prime Minister, Prime
February 2, 1981

Minister Thatcher, learned of the Canadian charter of rights, that it was only on October 6 that she had learned of the possibility of legal action in Canada, and that therefore, according to the British Prime Minister, it might become extraordinarily difficult for Prime Minister Thatcher's government to deal with the Canadian constitutional resolution because these complications had arisen so late. Does the Prime Minister remember that?


Pierre Elliott Trudeau: Madam Speaker, since the hon. member spoke in his question about lack of candour-


An hon. Member:: He was quoting you.


Pierre Elliott Trudeau: -I would point out to him that he lacked considerable candour the other day in the House when he said he had some evidence about the War Measures Act which would tend to prove that the government had bungled it. He has been challenged by the Solicitor General to submit that evidence, either privately or publicly, and, of course, he backed down, as is his wont.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, once again 1 must preface my answer by saying that I would prefer not to divulge the nature of the private conversation, but since the hon. member has obviously been informed of its nature-by whom, I do not know-and is asking us to table documents, and since the hon. member for Provencher said he had written proof of some evidence that the Canadian government had not asked what they said they had asked, I would ask him to table it, if he is so certain of his point.
To get back to the question, Madam Speaker, I am not surprised if the British Prime Minister told Mr. Pym, who would have told me, that she only knew the extent of the package on October 6, as, I believe, the hon. member said, because the package was only made public at that time. Until it was made public in final form, nobody knew, not even myself, exactly what would be in it. We knew what we wanted to be in it. We had been saying for years that it should contain a charter of rights and a patriation formula. We knew what we had asked the provinces in June to be in it, but we did not know all of that summer until the September meeting what in fact would be the final resolution, whether it would include family law, a charter, some provisions on fish or something else. We did not know that until the negotiations were finished.
In that sense, I cannot fault the British if they say they did not know for certain what was in the package when I spoke to the British Prime Minister in June; I did not know myself. What the whole country knew is what we hoped to see in it, and what the whole country knew is that we had told the provinces that we needed action, at least on the people's package, which included the charter, by September. That was clear, but it was not clear until we had tabled the motion, it was not clear to members of my own party what would be in
Oral Questions
that motion until the days before when we had discussed it in caucus and in cabinet.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: Getting back to the question whether there was an undertaking to present the resolution to the British Parliament at Westminster or to have the resolution passed by the British Parliament at Westminster, would the Prime Minister clear up, as 1 am sure he is quite willing to do now, whether or not the British minister, the Right Hon. Francis Pym, said to any Canadian minister at the meeting of December 19 that the government of Westminster does not dispose but rather proposes, leaving the British parliament itself to dispose, particularly with regard to constitutional matters?


Pierre Elliott Trudeau: Madam Speaker, I certainly would not give my seal of approval to that exact quotation, but anyone who is acquainted with the free parliamentary system knows that to be the case. The Prime Minister of Great Britain and the ministers who spoke to our ministers may well have taken that view. When I said the message from them, since October, has been that they would never look at the substance but that they knew that if the substance was more complicated it would take longer to get through, that is not a threat of any kind. It flows from the knowledge of how parliaments work-that it takes longer to get things through when the government does not have the unanimous approval of the House.


INQUIRY WHETHER CHARTER OF RIGHTS DISCUSSED
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I would like to ask further questions of the Prime Minister about that meeting of December 19. We seem to find that material is running counter to what the Prime Minister has said heretofore. 1 would like to ask him if the Mr. Pym on that occasion advised the Prime Minister that members of both Houses at Westminster would be reluctant to do something which they felt was up to Canadians to take care of, notably, the charter of rights?


Pierre Elliott Trudeau: Madam Speaker, I fail to understand what the hon. lady means when she says that what I am saying now runs counter to what happened at the December meeting. Would she please elaborate?


Madam Speaker:: A supplementary question for the hon. member for Kingston and the Islands.


Flora Isabel MacDonald: Madam Speaker, this is not a supplementary question; I am simply putting my question again.
I would like to ask the Prime Minister-if members on his side would like to listen-whether the Right Hon. Francis Pym advised the Prime Minister that members of both Houses in Westminster would be reluctant to do something which they feel is up to Canadians to take care of, notably, the charter of rights?

February 2, 1981
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, I am glad the hon. lady withdrew the preamble of her previous question because it was quite inaccurate.
Mr. Pym and I did discuss this matter. The attitude I took with him is one which I have taken constantly in the House. That is to say, every amendment since 1867 passed in Great Britain concerning the British North America Act, first had to be discussed and passed in this House. This is what is happening with this amendment. Not only was it discussed in this House but it was considerably amended by a committee of this House. Therefore, the British could not and should not take the attitude that they were being asked to do something which this House did not do. This House is precisely passing on the charter of rights.


Some hon. Members:: Hear, hear!


Madam Speaker:: Since the hon. member for Kingston and the Islands simply repeated her question I will allow her a supplementary question.


Flora Isabel MacDonald: Thank you very much, Madam Speaker. My supplementary question is with regard to this same meeting. I would like to ask the Prime Minister whether the present Canadian court proceedings were discussed with the Right Hon. Francis Pym. If so, did the Prime Minister say that the thing to do was to act as if everything was all right, and then if the court decision were to be unfavourable to the government, the matter would be discussed again?


Pierre Elliott Trudeau: Madam Speaker, I pointed out to Mr. Pym that the courts were being used by the provinces as a tactical ploy to obtain a delay. I substantiated that by-


Some hon. Members:: Shame.


Pierre Elliott Trudeau: I repeat my assertion in this House. The reason I said that is that we have six provinces wanting to contest the matter before the courts. The hon. lady shakes her head as if to say no. She will, at least, have to admit that that is right; six provinces are contesting it before the courts. Three of them are doing so with different questions. They are staging it so that it will all come out in a length of time. They have not been able to agree among themselves what questions they would ask. They have not been able to agree whether they would do it before one court, three or six. They have not even been able to agree on the timing. But they are not anxious to receive the answers quickly. They want to have the answers to one question before the other court studies the second series of questions, and so on.
This, to me, Madam Speaker-and 1 am just repeating my conversation with Mr. Pym-smacks of using the court to obtain political delay. When you do not have the courage to go to the people, and tell them that you do not like the substance, you do as the official opposition is doing; you discuss the modalities and the procedures because you know that on the substance you must agree with the government.


Some hon. Members:: Hear, hear!


EDUCATION
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, that is the most applause I have received in a long time! My question does not have to do with the machinations of the "Tory International" but with matters affecting Canada.
My question is for the Minister of Justice who is also Minister of State for Social Development. It concerns recommendations which are before the social development committee of cabinet at this very moment. I would like to ask the minister whether or not there are proposals before that committee which would have the effect of cutting $1.5 billion of federal funding to our universities and over $500 million for both hospital and medical care. Can the minister tell us whether it is the view of the government that it has the power unilaterally to amend the established programs financing legislation without negotiating with the provinces and without dealing with the groups in question?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, the Minister of Finance answered that question in the House last Friday and I have nothing to add to his remarks. Those programs of course are always under government review and time comes when they must be renegotiated, so the Minister of Finance explained the government position concerning the renegotiation of those agreements with the provincial administrations.


Bob Rae: Madam Speaker, I know the minister has other preoccupations; we are all aware of that. Nevertheless, there is a matter before a committee of cabinet which involves a very substantial question with regard to services which are to be provided to Canadian institutions right across the country from Newfoundland to British Columbia. He is the chairman of that committee. I think we are entitled to receive answers from him, not the non-answers we received from the Minister of Finance on Friday.
Are there proposals before this committee which would have the effect of substantially changing the responsibilities of the Government of Canada for post-secondary education? Can he at least give us the assurance that there will be no unilateral changes on the part of the federal government until such time as the parliamentary task force has had an opportunity to discuss the changes which the government is contemplating?


Joseph Jacques Jean Chrétien: Madam Speaker, some of these agreements with the provinces will reach maturity soon, at which time they will have to be renegotiated. We are looking into that matter right now. When the time comes we will negotiate with the provinces. At that time this House will be informed of the government's position in those negotiations, but it is completely premature to speak about it now.
February 2, 1981


UNEMPLOYMENT INSURANCE ACT
Mr.   Chas. L. Caccia@Davenport: Madam Speaker, my question is for the Minister of Employment and Immigration. It has to do with the eligibility requirements for maternity benefits under the Unemployment Insurance Act. In view of the fact that in 1980 an estimated 17,000 women were denied maternity benefits under the Unemployment Insurance Act, even though they were eligible to receive regular benefits, would the minister inform this Elouse if there are plans to amend the act in order to provide expectant mothers in the labour force with an equitable law? If so, when does he propose to proceed with a bill to amend the present act?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, as I have indicated in the House before, there is a review of the Unemployment Insurance Act being presently undertaken. The findings of that review are now being considered. Certainly the issue of the "magic ten rule" relating to maternity benefits is a major topic in that review. I hope to have results some time this spring which could be made public for consultation with interested groups and members of the House. As soon as we come to an agreement with respect to the direction to take in the unemployment insurance area, certainly in the area of maternity benefits, we would then be prepared to propose legislation. I do not see that happening until we have had an opportunity to have some form of public consultation.


THE CONSTITUTION
Hon. James A. McGrath (St. John's East):: Madam Speaker, my question is supplementary to the question raised by the hon. member for Kingston and the Islands. Given the Prime Minister's replies in the House today to the effect that the provinces were using the courts as a delaying tactic and that he conveyed this impression to the British minister in December, why did the government not accept the option of short-cutting this so-called delaying process and refer the matter to the Supreme Court, as it did in the case of Bill C-60?


Pierre Elliott Trudeau: Madam Speaker, for the very simple reason that we do not believe that it is up to the courts to decide this question, but that it is essentially a political question. That is the position of this government. What I did say to Mr. Pym, although it was not part of the answer I gave a moment ago, was that once the BNA Act was patriated with an amending formula and a charter of rights, any citizen can attack, if he wishes, any law which he believes to be ultra vires or illegal in some way. He can go to the Supreme Court and it will decide whether any
Oral Questions
part of the law is ultra vires. The courts make such decisions constantly. I believe there are some 30 cases before the Supreme Court right now dealing with constitutional matters. This matter would merely constitute one more case. If a citizen or a group of citizens does not want to be bound by the charter and wishes to prove that the charter is not legally binding, they can always take action in the courts.
Of course, our view is to the contrary, and all precedent is to the effect that when the Parliament of Canada submits a request to the British parliament, the British parliament has no choice but to pass the resolution in the form presented by the Canadian Parliament.


James Aloysius McGrath: Madam Speaker, regardless whether the government looks upon this matter as a political question or a question of law, the fact remains that six provinces have decided, on a question of law, on the question of the process, to take the federal government to court. The point I wish to make is that the federal government could have taken the question to court itself as it did in the case of Bill C-60, and the question could be based on the unilateral process of the government.
Did the Prime Minister discuss this with the British minister? Obviously, if he were to convey the impression that the provinces were using the courts as a delaying tactic, then the obvious question from Mr. Pym or from anybody else would be, "Why don't you take it to court?" Whether or not that question was raised, did the Prime Minister tell the British minister why the government was not taking the matter to court itself?


Pierre Elliott Trudeau: Madam Speaker, I just told the hon. member why we were not taking the matter to court.


James Aloysius McGrath: I know, but did you tell the British minister?


Pierre Elliott Trudeau: Madam Speaker, I cannot recall whether or not I told the British, but I am prepared to tell them now that this is our view. In so far as the comparison to Bill C-60 is concerned, the point raised by the hon. member has been made before and I have answered it before. Bill C-60 purported to have the federal government, within the powers it has under Section 91 of the Constitution, do certain things within its jurisdiction. Until that time we had believed that amendment respecting the Senate was under federal jurisdiction. When we were challenged that perhaps section 91 did not authorize us to change the Senate as a matter of federal jurisdiction, I said that I was prepared to test that contention in the courts. It is up to the courts to interpret Section 91 as it is written.
This is our position and it will remain as our position when the charter of rights is brought home. If the courts want to interpret the charter of rights and believe that it is ultra vires, I will stand by their judgment. But first let us get the charter and the Constitution to Canada so that the courts in Canada may say what they believe is the law.

February 2, 1981
Oral Questions


PROCESSING OF RESOLUTION THROUGH BRITISH PARLIAMENT
Hon. John A. Fraser (Vancouver South):: Madam Speaker, my spontaneous question is also for the Right Hon. Prime Minister, but first I would inform my colleagues that the print is so small that 1 will have to use my glasses to read it!
Was the Prime Minister informed by Mr. Pym that any judicial challenges to the constitutional resolution might well be crucial with respect to the processing of the resolution through the British Parliament with the charter of rights attached? That is a specific question and I would invite the right hon. gentleman to give as concise an answer as possible.


Pierre Elliott Trudeau: Madam Speaker, until now the questions asked have been with regard to what I told Mr. Pym or what I told Mrs. Thatcher and so on. I repeat, I hesitate to tell the House what Mr. Pym told me. If Mr. Pym wishes to say publicly anything which he told me, then 1 will release him from any secret to which he may think that he is bound. But it is not entirely proper for me to be the spokesman for Mr. Pym. If the hon. member insists and ask his question a second time, then I will assume that I must answer.


John Allen Fraser: Madam Speaker, this sudden concern or sensitivity for the conventions and proprieties with regard to the Constitution comes as a welcome surprise to us all.


Some hon. Members:: Hear, hear!


John Allen Fraser: No doubt the right hon. gentleman will find the proper occasion to inform the press with tongue in cheek of exactly what Mr. Pym said. Did the Prime Minister express the view to Mr. Pym that there would be many more challenges to the resolution following the challenges presently before the courts? Would the Prime Minister, despite his sensitivity to convention, let us know the answer to that question?


Pierre Elliott Trudeau: Madam Speaker, the hon. member talks about my sudden concern for constitutional proprieties. This is not a constitutional propriety; it is a rule which I have adopted since 1 became Prime Minister and the press knows that well. When asked about a private meeting, or about a federal-provincial conference held in private, I am generally quite free in saying what I say, unless it is agreed that the conversations would not be revealed.


John Allen Fraser: Tongue in cheek.


Pierre Elliott Trudeau: But 1 have rarely broken the rule of revealing what somebody else has said.


John Allen Fraser: Just the version of what you said.


Pierre Elliott Trudeau: In these cases, I always refer the press to somebody else. If somebody else, either directly or indirectly, has informed the hon. member of what was said and the hon. member is asking about what was said, I repeat, I would want to make sure that that person does not mind the comments
being repeated. If Mr. Pym or Mrs. Thatcher wish to make their position clear, then it is up to them to do so.


John Allen Fraser: Perhaps you would like an adjournment.


Pierre Elliott Trudeau: No. However, even with the help of my glasses, I cannot remember the end of the hon. member's question. Perhaps, Madam Speaker, you would allow the hon. member to ask his question again.


FISHERIES
Mr. Ted Miller (Nanaimo-Alberni):: Madam Speaker, 1 direct my question to the Minister of Employment and Immigration. It relates to the announcement made on January 19 with regard to the industry and labour adjustment program. In recognition of the serious difficulties in the auto industry and the anticipation of other difficulties arising throughout Canada, does the minister anticipate that some of the money allotted to that program will be provided to retrain fishermen who own vessels and shore workers in the fishing industry of British Columbia who, due to serious financial difficulties, are being driven out of the industry? Could the minister find some means by which a portion of those funds could be allocated to the British Columbia fishing industry in order to alleviate some of the difficulties there?


Lloyd Axworthy: Madam Speaker, the committee of deputy ministers assigned the responsibility of developing the criteria upon which the program would be implemented is presently at work. I will take the hon. member's reference to the problems faced by some of the communities in the fishing industry, refer it to the committee and ask it to determine whether these problems are applicable under the criteria being developed.


Edward Allan Miller: My supplementary question is to the same minister. The minister has received representations from various fishermen's groups and probably also from individuals and Members of Parliament, particularly those on this side of the House. These questions are in regard to the serious difficulties that fishermen encounter in becoming eligible for UIC payments and the difficulties that those who are eligible to collect encounter in obtaining the benefits. People wait eight, ten or 12 weeks for benefits that they are legitimately entitled to.
I should like to ask the minister if his department has determined any mechanism by which they can streamline the method of dealing with the claims of fishermen, and in order to alleviate some of the workload in fishing communities that make claims, can some mechanism be established to train additional agents so that claimants can receive what is due to them immediately?
February 2, 1981


Lloyd Axworthy: Madam Speaker, the hon. member has raised a very serious problem. I have had discussions with my colleague the Minister of Fisheries and Oceans concerning that particular issue and we hope to be able to find a solution shortly.


THE CONSTITUTION
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, with the permission of the Right Hon. Prime Minister I should like to come back to the exchange that took place between him and my colleague the hon. member for Vancouver South regarding the meeting he had with the Right Hon. Francis Pym. I should like to ask the Prime Minister whether, during the fascinating discussions they must have had, both being experts on constitutional law, Mr. Pym suggested to him that it would be helpful to have a reference to the highest courts in Canada on the important constitutional questions, because members of parliament in the United Kingdom were a bit uneasy about adjudicating or passing judgment on Canadian law.


Pierre Elliott Trudeau: Madam Speaker, that is a repetition of the previous question. I think it is probable that Mr. Pym said words to that effect. I took them to mean exactly what they convey, that it would be easier for the backbenchers in the United Kingdom to vote on this measure if it had the blessing of the courts. My answer to this line of argument has always been the same: it is not for the British front or backbenchers to judge whether what the Canadian government and Parliament is doing is right or not.


Charles Joseph Clark: Hear, hear!


Some hon. Members:: Hear, hear!


Charles Joseph Clark: At long last!


Pierre Elliott Trudeau: My case stands, Madam Speaker.


James Aloysius McGrath: So does ours.


Pierre Elliott Trudeau: I hope hon. members opposite will read the blues and see what they are applauding so vigorously.


Elmer MacIntosh MacKay: Madam Speaker, may I ask the right hon. gentleman briefly about his proposition that this is a matter of politics and not of law. Would he not agree that, regardless of which country adjudicates this important matter, it would be better to do so in the highest Canadian court rather than on an ex post facto basis, leaving the burden to some citizen as the Prime Minister said, to meet the legal expenses, and to consider these very important matters when they are really not as relevant as they are now, before these important steps are being taken?
Business of the House


Pierre Elliott Trudeau: Madam Speaker, that is the question 1 answered earlier when I said that this is a political matter. It is our view that it is for the Canadian people to judge what we are doing, not for the British people or British parliamentarians. The courts themselves will only judge when a matter is law; they will judge whether it is within or without the law. But this must be done in Canada, Madam Speaker. I submit that even the party opposite believes this because-


Charles Joseph Clark: Yes.


Pierre Elliott Trudeau: -when the hon. member for Provencher stated the position on behalf of his party, his position was prefaced-


Charles Joseph Clark: We believe it but you don't.


Pierre Elliott Trudeau: -with the following words. Madam Speaker. I do not quote the exact words-


James Aloysius McGrath: Get it straight, now.


Pierre Elliott Trudeau: -but he said that the patriation was wanted by popular will, that the amending formula was wanted by the popular will of Canadians, and that the charter was wanted by the popular will of Canadians.


An hon. Member:: Right on!


Arthur Jacob (Jake) Epp: In Canada!


Pierre Elliott Trudeau: In Canada.


Arthur Jacob (Jake) Epp: Done in Canada!


Pierre Elliott Trudeau: Done in Canada, Madam Speaker. That is why this House is doing in Canada exactly the things that the hon. member says it should be doing.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Madam Speaker:: Order, please. 1 have notice of a question of privilege but is the hon. member for Yukon rising on a question of privilege?


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


Madam Speaker:: I recognize the hon. member for Yukon on a point of order.


BUSINESS OF THE HOUSE
Erik Nielsen: Madam Speaker, my point of order concerns House business which might assist in future planning. The government House leader will be aware of the ruling of the chairman of the Special Joint Committee on the Constitution of Canada which has been widely exposed by the public media, and which stated categorically that the report from the com-
6776

February 2, 1981
Privilege-Mr. Neil
mittee will not be amendable in a substantive manner in the House.
I should therefore like to ask the government House leader if the government intends to proceed by way of a concurrence motion in the report of the committee and thereby deny the House the opportunity it would have, in the case of a bill or of a straightforward resolution, to move amendments?


Mr. Pinard:: Madam Speaker, I am not aware of that ruling of one of the co-chairmen of the joint committee. Furthermore, it is very difficult to reply to this question since I do not know what is in the report of the committee. Finally, I am quite willing to meet with the House leaders if they want to see me about this matter. Perhaps they can give me an answer to the suggestions that 1 made as early as October concerning the form of the final debate on our constitutional package.


Erik Nielsen: Arising out of that response, the government House leader will recall that last November he discussed with opposition House leaders the possibility of a special procedure which would recognize that we will not be dealing with a normal committee report but with one which is legislative in its effect. Does the government House leader have under consideration a special process whereby the proposed resolution could be dealt with in an orderly fashion, with amendments proposed in an unambiguous, straightforward manner?


Yvon Pinard: As I have just told my colleague, I am quite willing to discuss these matters at a private meeting, but not on the floor of the House. I had already begun discussions with the Progressive Conservative and New Democratic Party House leaders last fall. They even received material to submit to their respective caucus. I still have not received a formal answer. However, I am willing to meet with them again to discuss the form of the final debate on the Constitution at any time this week.


Erik Nielsen: Madam Speaker, after you have dealt with the question of privilege of which you have been given notice, and while I am considering that response with respect to a further point of order concerning House practices, I will simply give you notice now that I will be raising the question later this day.


PRIVILEGE
Mr. Doug Neil (Moose Jaw):: Madam Speaker, I rise on a question of privilege with respect to certain remarks made last Thursday evening by a minister of the Crown, namely, the
minister in charge of the Canadian Wheat Board. It is a statement which I believe affects the rights and privileges of members of this House. I will quote his remarks in a moment, but at this time I would indicate that the minister attempted to tie in members of the Conservative party with the separatist movement in western Canada.
As all hon. members know, a feeling of separatism is or has been building in western Canada. It is based on policies put forward by the government over the past several years, such as the arbitrary imposition of the metric system, gun control legislation, the attempt to repatriate the constitution unilaterally and, of course, the energy policy. These policies have caused a feeling of frustration and deep resentment which has never before existed in my part of the country. Naturally there have arisen individuals and groups in the west who have joined together in an attempt to bring their concerns to the attention of the government and of the people of Canada.
Among these people, of course, are some who have considered the possibility of separatism. In my area there are people who have expressed their concerns their frustrations, and have indicated to me their feelings of helplessness and their fears for the future of our country. I have spoken to many in this respect, and among all I have spoken to have found only one who espoused the cause of separatism-


Madam Speaker:: Order, please. The hon. member has already spoken for five minutes and I still do not know what the question of privilege is all about. I wish the hon. member would come to that very shortly and then present his arguments to prove there is a question of privilege. I would then be able to judge the value of the question of privilege. It has been five minutes now and I still do not know what is the question of privilege.


Douglas Charles Neil: Madam Speaker, I was simply trying to give the House and the people of Canada some background of the feelings which exist in western Canada. I will come to the statement to which I am referring.
Last Thursday evening in the Senate the hon. minister in charge of the Canadian Wheat Board, as recorded at page 1608 of the Senate Hansard, made certain remarks which, as I have indicated earlier, attempted to tie members of the Conservative party into the separatist movement in western Canada. He was talking first about the Crow rates. I will not go into his preliminaries, but the Senator went on to say this:
We are not going to get any support from western provincial governments or the opposition when we start down this road. All I said to the grain producers and the livestock producers, who have so much at stake, was that if they could agree among themselves on the stand the government should take in regard to a change, if any-and I am not sure there should be any change-then that would be a much more satisfactory way to proceed then to send a task force out in orbit, only to have provincial governments and the Conservative party saying, "Well, aren't we in great shape? We have the Constitution out there and we can really raise hell about that, and we can get our separatist meetings going with prominent Conservatives."
February 2, 1981

A little later he went on to say:
I have always been a Canadian. I think it is a good country and the Tories can flirt with separatism, their members can be converted, and they can send well-known Tories to stir up a separatist meeting for Knutson out in Saskatchewan-that's okay with me. I am a Canadian, and I will stay that way.


Madam Speaker:: Order, please. I do have to interrupt the hon. member now because I know what the basis of his question of privilege is, namely, a statement made in the other House. I must remind him of citation 314 in Beauchesne, which reads as follows:
The rule that allusions to debates in the other House of the current session are out of order, prevents fruitless arguments between members of two distinct bodies who are unable to reply to each other, and guards against recrimination and offensive language in the absence of the party assailed; but it is mainly founded upon the understanding that the debates of the other House are not known.
The other House obviously has rules to deal with its own questions of privilege. Therefore, those questions arising out of debates in that House should be dealt with there. I do not feel that 1 can hear the hon. member's question of privilege on the basis of this quotation and of those rules.


Douglas Charles Neil: Madam Speaker, through no fault of ours the government has chosen to name ministers who sit in the other place. It seems to me that under these circumstances we have no redress with respect to any comment that they make.


Madam Speaker:: Order, please. The hon. member does have redress and if he has a question to ask in the House about matters relating to the responsibilities of ministers who sit in the other House, even though there are ministers sitting in the other House, this is not a precedent. This procedure has taken place before. The rules provide well for any problems arising from this kind of a situation and that, too, is not an argument.


BUSINESS OF THE HOUSE
Erik Nielsen: Madam Speaker, 1 have had an opportunity of considering the response of the government House leader to my questions concerning House practices and House business. In his absence I would ask his parliamentary secretary to convey to the government House leader that if he were to call a House leaders' meeting as he suggested, then he would find both myself and the hon. member for Winnipeg-North Centre in agreement and that that House leaders' meeting, we suggest, should be held tomorrow so that discussions at that meeting can be discussed in our weekly caucus. In summary, we would like that House leaders' meeting tomorrow.


Mr. Collenette:: Madam Speaker, I will take those representations and convey them to the President of the Privy Council. I am somewhat surprised, as perhaps the President of the Privy Council will be, that this surfaced on the floor of the House today since our position was well known since last October when we had discussions. I would think that perhaps this occurred in the absence of the hon. member for Nepean-Carle-ton, and perhaps the hon. member for Yukon was not fully
Order Paper Questions
aware of the discussions that had been held. Nevertheless, I am sure that we can sort out the matter. Indeed we must, before the end of the week.


Erik Nielsen: Madam Speaker, I was here throughout that whole debate. What was said during that debate about the manner in which this resolution is to be handled at report stage and at third reading is the reason that I am afraid of the practices which the government is possibly going to adopt and that is precisely why I would like a House leaders' meeting tomorrow.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: Nos. 1,712, 1,725, 1,742, 1,820 and 1,906.


Mr. Stewart: 1.	For each year 1975 to 1979, what was the annual quota for (a) immigration (b) immigrants from the British Isles and the Republic of Ireland?
2.	For the same years, how many applications for landed immigrant status were made by applicants from the British Isles and the Republic of Ireland and how many were (a) accepted (b) rejected at the interview stage or any succeeding stage of processing?
3.	For the same years, what was the total number of landed immigrants from the British Isles and the Republic of Ireland?


Lloyd Axworthy: 1. There was no annual quota set either for immigration or for immigrants from the British Isles and the Republic of Ireland.
2. Applications for landed immigrant (permanent resident) status:
1975	1976	1977	1978	1979British Isles Republic of Ireland	29,024 1,334	19,775 635	15,651 540	9,412 519	12,409 62530,358	20,410	16,191	9,931	13,034
(a) Applications Approved:
1975	1976	1977	1978	1979British Isles Republic of Ireland	11,625 527	9,279 398	7,424 343	5,632 270	8,345 446
February 2, 1981
Order Paper Questions
(b) Applications Refused:
1975	1976	1977	1978	1979British Isles Republic of Ireland	17,399 807	10,496 237	8,227 197	3,780 249	4,064 179
3. Total number of landed immigrants:
1975	1976	1977	1978	1979British Isles	34,978	21,548	17,997	11,801	12,853Republic of Ireland	1,098	639	571	469	55336,076	22,187	18,568	12,270	13,406


Mr. Orlikow: For (a) 1978-79 (b) 1979-80, by province and territory, how many LEAP projects were contracted to private consultants and what were the salaries paid to the consultants?


Lloyd Axworthy: (a) and (b) LEAP projects are not contracted to private consultants.
Some LEAP projects contract with private consultants for a variety of services. No central register of such contracts is maintained.
Note: Because one application is often made for many people (i.e. members of the same family), the total number of approved applications (2)(a) does not represent the total number of landed immigrants actually admitted to Canada in any given year(3).


Mr. Herbert: 1.	Was approval given in March, 1978, for the design of Canada's first combination nuclear and gas-turbine icebreaker and, if so, to whom was a contract issued and in what amount?
2.	Has the design been completed and, if not, on what date will it be completed?
3.	Will the icebreaker be in operation by 1985?


David Michael Collenette: I am informed by the Departments of Supply and Services and Transport as follows:
1.	Yes. No contract has been issued for the design.
2.	No. It is estimated that the design will be completed within 30 months after the contract award.
3.	Due to long lead time required for design and construction of a nuclear/gas-turbine icebreaker, it will be impossible for such a vessel to be in operation by 1985.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Canada Employment and Immigration Commission for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Lloyd Axworthy: (a) $4,243,000; (b) and (c) $3,672,000.
Note: No breakdown available of (b) and (c) of the question because the information we have is by reporting object which includes publications and other information.


Mr. McKinnon: Did the Department of National Defence place a $50,000 contract with Canadair Ltd. for a field services representative to provide support for the CF-116 Freedom Fighter Aircraft Program and, if so (a) what support will the field services representative provide (b) for what period of time does the contract cover (c) are the contracts awarded on a continuing basis and, if not, how often are they awarded?


Hon.   J.-J. Blais@Minister of Supply and Services: The
contract was awarded by the Department of Supply and Services on behalf of the Department of National Defence.
(a)	The field service representative provides the following support services:
serves as a technical consultant to the Director of Aeronautical Engineering Maintenance (DAEM) at National Defence Headquarters (NDHQ); assists in evaluating technical publications, correspondence and messages;
affords rapid liaison between the contractor, Canadair Limited and DAEM/NDHQ on technical problems, flight safety matters, special investigations and fields queries;
assists logistics cells and specialist personnel at NDHQ on technical problems arising out of operation and maintenance of the aircraft and aircraft
systems;
assists in supply matters by identification of equipment and spares;
assists DAEM staff in reviewing technical correspondence exchanged as a result of the tripartite agreement to determine CF-116 (CF-5) applicability;
receives, collates and maintains for quick reference all technical information emanating from the contractor or field FSRs relating to the CF-116 (CF-5) aircraft.
(b)	The period of time covered by the contract is April 1, 1980, to March 31, 1981.
February 2, 1981

(c)	The contracts are awarded annually on a continuing basis provided an approved requisition defining the services required is received from the Department of National Defence.


David Michael Collenette: Madam Speaker, if question No. 177 could be made an order for return, that return would be tabled immediately.


Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Is it the pleasure of the House that question No. 177 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


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


Mr. Friesen: 1.	Have any departments or agencies of the government, conservation facilities for the preservation of artifacts of any description and, if so (a) where are these facilities located (b) what is the square footage of each facility (c) what does each facility do in specific terms (d) how many persons does each facility employ (e) how many conservators does each facility employ (0 do any of these facilities assist private individuals or agencies with conservation problems and, if so, how (g) what was the budget for each facility for (i) 1977 (ii) 1978 (iii) 1979 (h) are any of these facilities (i) rented (ii) leased and, if so, at what annual cost (i) what is the estimated value of the equipment used by the conservation personnel in each facility?
2.	Is there any body or agency which co-ordinates all of these facilities and (a) if so, how many persons does it employ and how are they chosen (b) if not, for what reason?
3.	How many of the conservators employed in each of these facilities were trained in Canada?
4.	Do any of these facilities take advantage of the preserving capacities of the climate in northern Canada and (a) if so (i) what is the nature of these facilities (ii) with which "southern" facility are they affiliated (b) if not, for what reason?
5.	Are any of these facilities set up with the sole purpose of developing conservation techniques to be employed in restoration of items deteriorating due to unique Canadian problems?
6.	Have any of these facilities produced written material for publication on conservation problems or techniques they have confronted or developed and (a) if so, what is a list of these publications (b) if not, for what reason?
Return tabled.


Madam Speaker:: Pursuant to Standing Order 54, I do now leave the chair for the House to go into Committee of the Whole.
Income Tax Act



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, January 28, consideration in Committee of the Whole of Bill C-54, an act to amend the statute law relating to income tax-Mr. Mac-Eachen-Mr. Francis in the chair.
On clause 1-
The Chairman:: When the committee rose on Wednesday, January 28, 1981, clause 1 of the bill was under consideration and the hon. member for Kindersley-Lloydminster had the floor.


Mr. McKnight:: Mr. Chairman, I understand 1 have a few moments left. As I notice the furniture being moved about, may I ask the Minister of State for Finance whether today is the day we get answers to our questions?


Mr. Bussieres:: Mr. Chairman, I believe the agreement was that we would not go on with the clause by clause study-in other words as long as the debate would go on on Clause 1, I would not answer questions. Should debate on Clause 1 end later this afternoon, of course, 1 would be prepared to answer questions raised during the debate.


William Hunter (Bill) McKnight: Mr. Chairman, that makes it simpler. I will continue to ask questions, and I hope that at some later date I will receive the answers to them.
The minister knows that the spouse's tax allowance was copied from the Crosbie budget. Some of my constituents have been writing to me, and others have been telephoning. They are not as familiar with the ways and means motions as are some of us. Considering some of the language, as 1 explained earlier, we can understand that. They are wondering when this change will be made.
They would like to know whether a news release will be put out by the minister explaining to unincorporated businesses so they can be aware of the fact that, if a small businessman is making less than approximately $17,000, and if he transfers much of that income to his wife, then one or the other of the spouses will be in trouble in terms of getting the maximum deduction under the Canada Pension Plan. Will the minister assure the House that he will prepare easy to read literature so that the taxpayer can take advantage of these proposals? Many people do not understand how to apply for Canada Pension Plan benefits. When they are due to them, they sit and wait, expecting them to come automatically at age 65. This is due to a lack of information.

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1 have another question regarding the Small Business Development Bond. The minister adopted the Crosbie small business development bond, which is very commendable, but then proceeded to make it inoperable by shortening its time limit and restricting it to certain kinds of business ventures. The Crosbie budget was not passed. The finance minister reintroduced it in his so-called mini-budget of April. He said he would reintroduce the bond, but would not extend the deadline. On October 28, in his real budget, he extended the Small Business Development Bond for three months, to March, 1981.
March, 1981, is drawing near quite rapidly. Will the minister consider extending the time at least one full year? We would like to see it extended for at least a year. Several of my constituents are anxiously awaiting approval of applications for the Small Business Development Bond. Some fear they will not have the approval before the deadline which this government arbitrarily set. If it is really the government's belief that this bond will assist small businessmen in Canada, it is its responsibility to extend the deadline for at least one additional year so that people can benefit from it.
I wish to reiterate a few points which I hope the minister will not forget to answer. When campaigning for re-election, his party made a commitment to update V-day from 1971 to 1974 on farm land in Canada. If that is not changed, it will place a hardship on those who own farm land and want to transfer it from generation to generation. We recognize that if it stays within the immediate family now, it is not necessary to pay capital gains tax. But if it is sold after two or three generations, the capital gains tax will eliminate any benefit these people worked for. I hope the minister will comment on that.
I would also like to know what happened to the tax on Canadian wines which the Minister of Agriculture talked about during the election. Also, the Minister of Agriculture made a commitment to enlarge the Farm Credit Corporation. The only enlargement 1 have seen is the highest interest rates in the history of the Farm Credit Corporation which we have under this government. Will the Farm Credit Corporation have access to new funds? In its short term, the Clark government found an additional $50 million for the Farm Credit Corporation. Anyone who checks will see that is fact. That shows the difference in commitment to the Farm Credit Corporation between our government and this government.
I hope the minister can advise us that they will be enlarging the Farm Credit Corporation and not just interest rates. There are hundreds of applications in Farm Credit Corporation offices waiting to be funded. I hope this will be looked after so that young men and women wanting to farm will have access to Farm Credit Corporation money. I look forward to the minister's answers at a later date.


Pierre Bussières: Mr. Chairman, with leave of the House I would ask for a brief interruption in the debate to seek unanimous consent with a view to tabling strictly technical amendments to this bill. It will be understood that after
introduction of the bill the drafting was closely scrutinized so there would be no confusion. Some purely technical amendments mostly of an editorial nature were made and, should the House agree, I will table these technical amendments along with short explanatory notes. We have copies for distribution to the spokesmen for the various parties, if leave is granted.


Cyril Lloyd Francis: Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Blenkarn:: Mr. Chairman, the most serious problem we face in the country at the present time is the extraordinarily high interest rates which seem to be part of the government's policy. For at least the past seven weeks the Bank of Canada rate has been at a level around 17 per cent. That rate affects the borrowing costs of every business and every citizen of this country.
The effect of these extraordinarily high rates is unprecedented. The interest rate of treasury bills indicates what will likely be the Bank of Canada rate, looking down the road. As of Thursday, the sale price of six month or 180-day bills was approximately 16 per cent. When you look into the after market and the sale of like services for the balance of the year, it is not likely we will have an interest rate in this country at any time during this year determined by the Bank of Canada of less than 15 per cent. That does not bode well for the progress of business in this country. For example, in today's paper, Bob White, Canadian leader of the United Auto Workers, blames the nation's economic sickness on high interest rates and a lack of any stimulus by government. White said only the big speculators win when the government fosters high interest rates to protect the weak Canadian dollar, while working people lose jobs.
When we look at Bill C-54 we see there are only two or possibly three clauses which do anything for the business community with regard to creating jobs and getting our economy rolling again. The most important clause in the bill in this regard is clause 8 dealing with the Small Business Development Bond. To refresh the minds of hon. members, this measure was first introduced in the Crosbie budget of December 9, 1979, reintroduced in April, and reintroduced again in October. However, under this bill it is scheduled to expire on April 1, 1981. Even more disastrous is the provision which provides that unless the work that is authorized under the bond is completed by April 1, the bond provisions are of no effect. I have said on another occasion in this House in respect of this clause that it has been and still is virtually impossible for a small businessman to use the provisions, or to have been able to use them since it was first introduced.
On Friday a small businessman, Doug Flowers, principal shareholder and director of Glen Erin Skate Fimited and Gold Line Curling Supplies, spoke to me about this matter in my constituency office and told me how his negotiations were going with the Toronto-Dominion Bank and the Royal Bank.
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This small businessman wants to create a 35,000 square foot facility in Mississauga. That facility can be financed by an arrangement with his banker on a long-term first mortgage at 1.5 per cent over the GIC rate, which means for this small businessman a 15.25 per cent or a 15.5 per cent interest rate on a first mortgage. On that basis if he can do something he can borrow up to $825,000. He was hoping to use a Small Business Development Bond for the balance of his funding on a secondary finance basis and so be able to start this business, get the new expansion going and develop the 35,000 square feet of space. He has been advised by his bankers that unless the bill is through and all the work is done in accordance with the provisions of the bill by April 1, the Small Business Development Bond will, of course, be of no use to him.
The effect is then that if clause 8 is not extended, Doug Flowers and his company will not be able to complete the work they intended to do, and this project in the city of Mississauga, which will involve about $1.7 million, will not go ahead. The secondary financing portion that could be covered by a Small Business Development Bond at a net cost, after other allowances to the company, of somewhere in the neighbourhood of 13 per cent, will wind up costing, because of the prime rate activity encouraged by the Bank of Canada rate, in the neighbourhood of 20 per cent, and the project will not be viable.
The other day in speaking with the Minister of State for Finance, who is here, I explained this to him and he said there is going to be cost to the government in allowing the Small Business Development Bond to be extended. My conversation with him, sir, was that that was nonsense because there would not be any cost.
In the case of Doug Flowers he will put a project on ground that will produce $1.7 million worth of new construction, development, or whatever you want to call it, in 1981 in Mississauga. It will involve block layers, carpenters, electricians, building trades throughout, and the people who are going to supply the machinery and equipment. All of those people will earn money and will pay personal income tax.
While the government, by allowing the Small Business Development Bond to go through, will lose some income revenue by taxing interest in the conventional sense in that fashion, it will make it all up and more through personal income taxes paid by those people involved in doing the new things required under the provisions of the Small Business Development Bond. There will not be any loss at all in government revenue because there will be development. The bond will act as a stimulant and there will be no loss to government.
I would like to see the bond extended, of course, to cover the cost of carrying inventory and the cost of carrying receivables for small business. That was the original intent when the bond was first introduced by the former Minister of Finance. Even on its narrow base with the bond useful only for new development, there is absolutely no loss to the government.
There is no question about it, Sir, we are in a slack business time. We have the building industry not operating at anything like capacity; we have machinery and development not acting
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at anything like capacity, but if we can stimulate, through the use of a Small Business Development Bond, new development by small industry and small business, and we can give them a reasonable time to get their affairs in order and get progress going, then we will do something through this bill. We will get Canada growing and moving again.
Really what we are saying to the minister is that if he really believes in small business and really wants to show the country that he wants to make Canada grow and develop again, what he must do is take advantage of this concept produced by the former minister of finance under our government, and use it. The government adopted this concept when it produced the budget in October, but businessmen have not been able to use it because the statute has not been passed. The way the statute is now presented, expiring on April 1, they will not be able to use it at all.
During this time when interest rates are likely to be Bank of Canada rates at 15 points for the balance of the year, at least, and when the prime rate is likely to be 16 per cent, 16.5 per cent, and now 18.25 for the balance of the year, surely knowing that small business in particular has no option except to do its financing through the financial activity of the bank, this is the time to give small business the opportunity to borrow up to $500,000 to get a project going on an income debenture type of arrangement for at least a year. Obviously businessmen need certainty, and they need it for a period of time. They have to organize their affairs to get something going.
Again I want to point out to the minister that because the bond is limited to new activity, and because that new activity by its very nature will mean new employment and new investment-we are not financing old investment here, but new activity and new investment-there really is no cost at all to revenue. It will provide enormous help to small business, making small business in Canada grow again.
To amend that clause, extending it to the end of the next fiscal year, or at least to the end of this year, there would really be no net cost to the government whatsoever. We have said clearly to the government that if the government will move on this clause, give it careful consideration and change it, we might be prepared to look more favourably at some of the other parts of the measure, and perhaps expedite something. In this regard I believe we could have meetings of the House leaders.
Before I go on to make the minister aware that that is not the only thing wrong with this bill, although I would be pleased if he would consider the Small Business Development Bond, I would like to refer the minister to the provision with respect to cash accounting. Under the present rules farmers are the only people entitled to go on a cash basis. This legislation changes cash accounting requirements to allow fishermen as well to go on a cash basis. It is our view that all small business should be able to go on a cash basis, if desired. That would not cost the government very much. It would delay

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the payment of tax somewhat, but it would not cost anything. To the extent that it would delay the payment of tax I suppose it would cost something, but one of the things this government always talks about, but never does anything about, is relieving the paper burden and reducing the overhead costs of small business.
One of the enormous factors in overhead is accounting costs. This is particularly so for a small business with one or two employees trying to run a store or small professional office. There is a requirement to be on an accrual basis, to pay tax on money not received, to take reserves for doubtful accounts and to do everything, from an accounting point of view, which is appropriate for large businesses. This creates a burden for a small business because a small business does not have the necessary equipment or ability. Small businesses must hire extra accountants and others for help. If the government really wanted to encourage small business-and perhaps even unincorporated small businesses-and if it wanted to do it on that basis, it would do a great deal to stimulate activity and employment. Some of the things which drive a man out of his tree are the paper burden and accounting costs.
Many of us have spoken today and previously about the enormous complications of the Income Tax Act. It is horribly complicated even for the most sophisticated accounting firms. It has been suggested that very few accountants or lawyers in this country could say honestly that they understand the Income Tax Act from cover to cover. In the small towns of this country, away from such sophisticated and large accounting houses as Clarkson Gordon, Coopers & Lybrand, Laventhol and Horwath and Deloitte, Haskins & Sells, there is just no one who really understands the act and where we are going with it.
One thing which would help those areas particularly would be to go back to the cash accounting basis for small businesses. As 1 said, the cost to the government would not be too great. People would have to pay tax anyway. It is only a question of when the tax becomes payable. On a cash basis the tax is obviously not payable until you receive the money. That is the way it is for farmers. That is the way it will be for fishermen. Why can we not have it that way for the small storekeeper, the small professional or the person who is trying to get going in order to make Canada grow? Why do we have to impose on these people the horrors of accrual accounting and the tax implications of accrual accounting?
Another provision in the bill is with respect to the 3 per cent inventory allowance. All businesses today are suffering. The report of the Economic Council of Canada clearly points to the problem of inflation. Last year there was more inflation in Canada than in any of the years going back to wage and price controls. Preliminary figures already show that the rate of inflation this year will be in excess of anything we have ever had before. Despite the projections of the Minister of Finance in his budget, which he now disclaims, all indications are that the rate of inflation will be very close to 12 per cent this year. For business people that means that while they do their capital cost allowances on an historic basis, in many cases when
equipment which has been depreciated wears out, it cannot be replaced because when a businessman goes to purchase equipment he finds that its price has increased two or three times.
It is not uncommon in the construction industry for people to sell four or five-year-old bulldozers for more money than they paid. Farmers today are often able to sell their tractors for more than they paid three, four or five years ago. That is not uncommon at all. That is the result of inflation.
There is nothing in this bill-including the inventory allowance which, to some extent, has been justified in order to cover the inflationary cost of replacing inventory-to solve the problem business people face because of the fact of inflation and the fact that our Income Tax Act at the present time, while it allows one to write off equipment on a capital cost allowance basis, does not allow one to reserve from profit the inflationary fact to enable the replacement of equipment and machinery without further investment of capital.
I would like the minister to give us his views with respect to inflation accounting, interest rates, and the Small Business Development Bond. Could he also talk about a cash accounting system for people other than fishermen and farmers?


Mr. Shields:: Mr. Chairman, it gives me a great deal of pleasure to speak on Bill C-54, a ways and means bill to amend the Income Tax Act. It is'very obvious that there is absolutely nothing in this bill for farmers, fishermen, or small businesses. As my colleague previously indicated, farmers, fishermen, and small businesses are facing extreme hardship because of high interest rates.
The small businessman has to carry an inventory. That is the lifeblood of his business. He has to carry that inventory at prime plus 2 per cent, which is about 20 per cent. There is nothing in this ways and means bill which deals with this, yet we are asked to approve a bill which would allow the government to borrow a great deal of money. One cannot help but ask whether we are borrowing this money to assist, for example, motorists from the northern United States who come across our border daily, or three times a week, to gas up their cars because gas is so much cheaper here in Canada. Two dollars of every six the American motorist saves at the gas pump in Canada is directly subsidized by the Canadian taxpayer. Is that why we are borrowing money?
Are we also borrowing money to subsidize foreign fishing fleets which come to our shores to fill up with fuel? For every $6 saved there is a direct subsidy of $2 paid for by the taxpayer of Canada. That is one third. That is ridiculous. The whole thing escapes me.
Are we looking also at the airplanes, the overseas aircraft which land in Canada with their fuel tanks empty, and fill up here? For every $6 they save, we pay one third which is directly subsidized by the Canadian taxpayer. All this government can do is borrow more money.
In my view there is something wrong there, there is some rot that is eating away at the core of this government. I cannot see
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why we do not address this problem, the solution of which is so important to every man, woman and child in our country if we are to keep our country together, and that is the energy agreement which must be reached between the Government of Canada and the producing provinces. It must be recognized that an energy agreement would break the flood dam and allow the heavy oil sands plants to proceed on schedule with the direct investment in Canada, of at least $20 billion of private capital. It is not the government which should go out and borrow money but it is the people who should invest. We should get the economy of the country rolling again.
The total difference between the agreement proposed by Premier Lougheed of Alberta and the proposal of the Minister of Energy, Mines and Resources, between now and 1985 amounts to only 30 cents at the gas pump. That is the gap about which we are talking. But what is the difference in terms of jobs? It will mean thousands of jobs in central Canada. The megaprojects would attract other investment in Canada, investment which is badly needed in all areas of our economy, such as housing, pipelines and construction. What we should do is create an attractive climate so that people will want to invest their money here. It seems to me that once we reached that happy situation, we could say, "We don't want your investment, but if you really want to, you can invest at a lower interest rate". This would have the direct effect of bringing in more investment. That is what we should do, rather than riding on the coattails of our neighbour to the south and trying to keep up with their interest rates.
Now I should like to make a few comments about our farmers, fishermen, and small businesses. Last week when I was in my riding I discussed a number of problems facing the farmers in Athabasca, Bonnyville, Grand Centre, Glendon, and Lac La Biche. These gentlemen are genuinely frightened because, first, the funds of the Farm Credit Corporation are drying up and, second, the corporation must apportion the funds in such a way that a disproportionate amount of money will not go to small farming areas in my riding in western Canada.
The farmers are genuinely concerned because they are losing their herds. When the herd maintenance program was introduced, about 20,000 applicants were refused the subsidy. All they wanted to do with the subsidy was to use it to maintain their breeding herds so that they could expand their herds in the summer. We all know that their hay crops were devastated. They are genuinely worried because they are now borrowing funds from the bank, their cash flow has dried up, and they are paying interest at close to 20 per cent and, in some cases, 22 per cent.
1 was also talking to small businessmen. One of them, a good friend of mine, has a men's wear store. He told me that although he is carrying an inventory, he is facing bankruptcy because his stock is not moving fast enough. There is no way in which he can move his inventory out of the store without taking a direct loss, and this threatens his very livelihood. Exactly the same thing is facing the small hardware merchants in country communities in northeastern Alberta. They carry
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an inventory which is far in excess of what they can move, and they are being killed by the interest rates.
What is the government doing about the small business development bond? It cannot be used for inventory; it can only be used for capital expansion. When the small businessman walks into a bank to discuss the small business development bond, he finds that the bank manager does not know what is happening because he has had no direction from the government. He has heard that it will be extended, but he has had no direction, so he is left dangling. In the same way small businessmen do not know what is happening. Again they are being left out.
Now I should like to discuss for a moment something which I believe government members should seriously consider. I am referring to the strong feeling which is developing in my riding, and indeed in many ridings in western Canada. What is being expressed is alienation. People are attending separatist meetings and West-Fed meetings. These are average farmers, businessmen and school teachers. They love Canada, they love their country, and they are expressing something that this government does not understand. What is so sad, Mr. Speaker, is that the government does not even know that it does not understand.
When the founding provinces came together in 1867 the terms of confederation for Ontario, Quebec, New Brunswick and Nova Scotia were that the provinces would own and control their natural resources. That was one of the main conditions when they came together.
In 1870 the region which is now the three prairie provinces was transferred from a trapping and trading reserve controlled by the Hudson's Bay Company to a colony of the new federated provinces. It became a colony of the new Dominion of Canada, the new federated provinces of Quebec, Ontario, New Brunswick and Nova Scotia. That same year, as a consequence of the Riel rebellion, Manitoba was created. Since Manitoba was not given control of its natural resources it really remained a colony in all but name.
In 1871 British Columbia joined confederation. But in 1858 it was organized and by 1866 had defined its boundary limits. So it joined confederation, but as a province which owned and controlled its natural resources.
In 1873 Prince Edward Island joined confederation. Very clearly this new province owned and controlled its natural resources.
In 1905 Alberta and Saskatchewan were carved out of the colonial territories. They were called provinces but, in fact, they were not, since they neither owned nor controlled their natural resources.
We see through this chain of events confederation taking shape quite rapidly. But there were actually three provinces, Manitoba, Saskatchewan, and Alberta which did not own their own natural resources. Every other province did.

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In 1912 the boundaries of Ontario, Quebec and Manitoba were pushed north to their present boundaries. Why were they pushed north? It was because of the richness of the resources contained in the northernmost parts of these provinces. Quebec and Ontario immediately received title, ownership and control of the natural resources in that expanded northern area. But, lo and behold, Manitoba did not receive control and ownership of of its natural resources. It seems inconceivable to me that this could have happened. Three provinces were expanded, but only two received rights over their natural resources. Manitoba did not receive ownership and control of its northern resources since it did not have control of the resources in the rest of the province at that time.
In 1930 there was a great deal of agitation developing in the western prairie provinces of Manitoba, Saskatchewan and Alberta. There was outright hostility. I cannot help but think that history is now repeating itself. We have only to look back. There was agitation, hostility, and talk of separation. It was only when this kind of talk developed, when farmers got together and met in small bands and groups which grew larger, that the government finally listened. We now see this same talk developing in western Canada. There are groups such as West-Fed. But what does our illustrious Prime Minister call this talk? He calls it blackmail. In 1930 it was not blackmail, it was an expression of how people felt. In effect they were saying, "You people in central Canada do not understand what is happening in the prairie provinces. You must understand what is happening before our country falls apart."
The problem with the energy agreement stems directly from the kinds of things I have tried to outline. It took Manitoba 60 years to gain control of its natural resources. In fact today Manitoba can boast that since it has been a province it has been without control of its natural resources for longer than it has had control of them. Alberta and Saskatchewan were able to gain control of their resources in 1930-50 years ago. When one finds this happening with respect to any agreement, any attempt in a budget or energy agreement which tries to take away the control and ownership of natural resources, people in the producing provinces will not accept that, since they will not go back to a colonial status. 1 urge the government to try to understand this basic fact. I urge it to get on with the job of negotiating a proper energy agreement.


Bob Rae: Mr. Chairman, I have been listening with some interest to the remarks which have been made during this debate. I want to say to the hon. member for Mississauga South that I am somewhat amused he finds it in himself to object so strenuously to the Bank of Canada's 1981 policy but somehow he lost his power of speech in 1979 when his own party was in government. The policies being followed by the Bank of Canada today are exactly the same as those followed by governor Bouey in 1979. The principles, philosophy, fundamental thinking, the same mind-set, assumptions, predilections, the same problems, excuses and inactivity which mesmerized the Crosbie-Bouey duo we faced in the finance committee are exactly the same as those of the Crosbie-MacEachen-Bussieres trio which we are faced with today.
While I welcome the member for Mississauga South and all members of the Tory party who are opposed to high interest rates, we all know perfectly well their stand on this position is temporary, depending upon whether they are in opposition or in government. It simply depends on which side of the fence they happen to find themselves with respect to the reasons why they are opposed to the high interest policy of the government.
It would be improper for me to use this opportunity to engage in another discussion, as I have done in committee and as many hon. members have done, on the government's interest rate policies. However, one important point must be made, that the minister has been working on the assumption that the high interest rates which the country is suffering at the moment are a temporary phenomenon. We have warned the minister that this is not the case, that as long as these interest rates are tied to the situation in the United States and to a policy over which we have no control, we do not know where our rates will be. They will probably be very high because of the policies followed by the bank. Therefore it is necessary for the government to change its interest rate policy and to devise tax policies which will overcome the effects of these very regressive interest rate policies which are being followed.
Examples have been given by members of the official opposition and by my colleagues of the effect this thinking has had on the construction industry, the housing industry, small business, and on farmers throughout the economy. It is simply not possible for the government to say, as it has said, that this is a temporary phenomenon and it would be unwise for the government to act in a precipitous way in response to what is simply a temporary fever which is the result of the policies being followed in the United States.
It is clear that the problems facing the housing industry and the construction industry are not simply temporary, but are permanent. In my own constituency the level of unemployment in the construction industry has been well over 30 per cent for the past two years, and there are construction workers there who have been out of work for over two years and, as a result, have been forced to take on different kinds of jobs. This has been going on since I was elected to Parliament. While that may seem like a long time to the minister and others who have had to listen to me, it has been just over two years. That is somewhat of a condemnation of the kinds of policies which have been followed by the government, that there is such a situation where workers have been left, in every sense of the word, permanently unemployed as the result of the government's policies.
Rather than focus on the problem of interest rates, although I wanted to say something once again on this subject because it is of real concern and it does affect the over-all tax policies and the nature of those policies followed by the government, I want to add to my earlier remarks on capital gains and talk about the government's discussion paper on capital gains which, in a sense, has affected many of the proposals put forward in Bill C-54, which we are discussing at the present
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time. My disappointment with respect to the government's policies is twofold. My first disappointment is that the government has not made a decision as to how it will deal with the discussion paper. It seems to me that we should have received some indication from the government by now as to how the House will deal with this paper.


Donald Alex Blenkarn: We should have had a committee.


Bob Rae: It is all very well for the government to present a discussion paper, the outlines of which I will try to summarize in a moment, and it is a study which deserves discussion. Unfortunately, I am not clear, nor has it ever been clear to me, how the discussion would take place. I can discuss the matter with the minister or we can discuss the matter among ourselves, and we can all attempt to come to grips with the subject matter, but surely the government must take some initiative. Will the paper be referred to the Standing Committee on Finance, Trade and Economic Affairs, or a task force, or does the government intend to bring in legislation with respect to the capital gains tax, in the next budget, or will the paper be shelved forever? If the paper is shelved, it will not be the first such discussion paper, investigation or report, to see that end.
However, I am a little startled that we have not received one statement from a member of the government indicating its general attitude with respect to the proposals put forward. It may be because there is no unanimity in the government on its views with respect to capital gains. I expected a clearer indication as to how the government intends to deal with the problem, rather than it merely leaving the matter on the floor to see who picks it up and kicks it around. We can anticipate from the Conservative party a general defence of privilege which will lead them to argue that capital gains tax should be either abolished or reduced to a nullity.
The report discusses the problems of capital gains and the way in which the system presently works. I would like to raise those matters with the minister, as well as my suggestion on what should be done with the report. The study reveals that Canada has the lowest rate of tax on wealth inheritances and gifts of all the OECD countries. It shows that 7.1 per cent of taxpayers, all of whom had assessed incomes in excess of $25,000 in 1978, received two thirds of all taxable capital gains income. Even more striking, less than 1 per cent of taxpayers, with incomes over $50,000, received 43 per cent of those gains. The study also reveals that the combined federal-provincial marginal tax rate on capital gains is one half the rate on other income, and that the maximum federal tax rate on the income is a mere 21.5 per cent.
These findings should be no surprise to anyone. They can be explained in part by the elimination of federal estate and gift taxes in 1972 and the decision on the part of nine of the ten provinces to abandon succession duties, but they are also due to the leniency of our capital gains tax which exempts one half of the gains from taxation and allows recipients to minimize a tax by declaring gains only when they are realized.
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On the first point which deals with the general question of wealth and inheritance, it is interesting to note that for the last year the federal government imposed an estate tax, 1971, it brought in $100 million which, in 1980 dollars, amounts to over $200 million. The deemed disposition on death capital gains tax is calculated to have collected $11 million for the government in 1978. I mention this fact because when I last spoke on this subject during second reading debate on this bill, I was upbraided by several members of the Liberal Party and of the official opposition who said, "Well, you taik about the fact that Canada has the lowest rate of tax on gifts and inheritances, Mr. Rae, but what you do not mention is the fact that we have introduced the capital gains tax and the deemed disposition on death to make up the difference". My response was that in fact the evidence showed there is no comparison between the income lost and abolition of the estates tax and the income which has been gained for the federal government through the imposition of deemed disposition on death.
The government cannot get around the problem by saying that the one half tax on capital gains satisfies the inequity created in our tax system, because it allows so much money to be transferred from generation to generation by very wealthy Canadians without having to pay any taxation to the government. I am not referring to average or lower income Canadians. I am referring to the wealthy Canadians.
There are really two systems in Canada. There is what I call the "fairness system", which is the system which applies to all employees. This system is progressive and it takes money from its source. Then there is what I call the "discrimination system". The discrimination system exists for those who have enough money to be able to invest in the shelters, to create trusts, or to be able to use the tax system to their advantage. The capital gains system is part of what I call the "discrimination system". If we make changes within the discrimination system alone, the effect is simply to increase the burden of the average taxpayer.
Let me give you a concrete example which is discussed in the government paper and which is affected by several of the measures proposed in Bill C-54. The minister will know that the widespread use of dividend and surplus stripping was one of the main reasons for the creation of the Carter commission. Surplus stripping means that instead of declaring a capital gain-instead of taking surplus off in the form of income, a decision is made to transform that surplus into a capital gain and not take it in the form of a dividend. This is something which can be readily done by personal incorporations, and indeed by the creation of several personal companies in order effectively to avoid any dividend tax at all.
The full taxation of capital gains would have solved the problem which lay behind the creation of the Carter commission in 1962. However, the government chose not to go that route, and instead taxed half of capital gains, and invented the dividend tax credit. At first the dividend tax credit was low, and there remained a considerable incentive to strip surplus in

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the form of a capital gain. The government therefore felt obliged to increase the size of the dividend tax credit, in order to create greater equality between the marginal rate for capital gains and the marginal rate for dividends.
From a technical point of view, if the government wants to stop surplus stripping, the answer is to increase the size of the dividend tax credit so that it will be more attractive to take the surplus in the form of a dividend than in the form of a capital gain. The problem with what the government has done, however, is that by creating greater equality between dividend income and capital gains income it has widened the gap between both of those kinds of income and earned income.
For example, Mr. Chairman, a taxpayer who earns less than $18,000 pays no tax on dividend income. If all income is dividend income he can earn up to $37,000 and pay no income tax at all. At $18,000 he pays 18 per cent on capital gains income and 36 per cent on other income. You can see the discrepancy, Mr. Chairman, but watch how it narrows. If he makes $30,000, the marginal rate of tax is 16 per cent on dividend income, 24 per cent on capital gains income, and 48 per cent on earned income. For a taxpayer making $50,000 the marginal rates are 25 per cent for dividends, 27 per cent for capital gains, and 54 per cent for other earned income.
In other words, this technical change in the discrimination system has occurred which furthers the imbalance between the two systems.
This may all sound very technical, but let me point out that the revenue cost of the change in the dividend tax credit for 1979 was estimated to be about $200 million. This is not exactly an insignificant amount. There was a major tax cut for dividend holders, and that means that the government said, "Fook, we are giving tax cuts, we are making tax expenditures in this area, therefore we cannot afford to make other kinds of tax cuts."
That is why 1 say that one person's tax loophole or benefit becomes another's tax burden. In this case 5.6 per cent of Canada's wealthiest tax filers were subsidized to the tune of $200 million by 94.4 per cent of the people. This is not the kind of subsidy or tax cut which can be readily understood or even known by the average taxpayer. It is fair to say that the changes which have occurred within the discrimination system in order to create greater equality between dividend income and capital gains income, have only had the effect of necessarily increasing the burden on the average taxpayer who receives neither capital gains nor dividends.
When the Carter commission made its report, and when the government's white paper and the government's tax reform were introduced in 1972, we were told that we could never have full taxation of capital gains because a full tax would have inhibited savings and economic growth, would have reduced the supply of risk capital and, in general, would have impeded capital markets.
These were simply assertions in 1972. I suggest to you, on the basis of the report which is before the House and the
people of Canada at the moment, that in 1981 these remain unfounded assertions.
I find it ironic that without having the courage to draw such conclusions directly, the paper makes a very strong case for full taxation on capital gains.
There have, of course, been strong suggestions from many groups, particularly farmers, that the current taxing regime and capital gains have threatened the very existence of the family farm and small family business. There may well be cases of hardship arising from the deemed disposition of family agricultural land, and from the fact that valuation day is still 1971. These matters have been brought to the attention of the minister. I do not come from an agricultural riding so this was not one of the top items in the Liberal brochures that I saw in the last election campaign. I know from my colleagues who do represent agricultural ridings, however, that the Liberal promise to change valuation day was one of the planks, along with double-tracking of railways and other such flights of fancy, that was at the heart of the Liberal program in western Canada.
The point is that if there is a problem which affects the family farm, if there is a problem which affects valuation day, if there is a problem which affects the question of the small family business, these are all exceptions that can be made whether capital gains is taxed at half rate or whether it is taxed completely. The answer to the problems facing the family farm and the small family business is not to abolish capital gains for everybody but to attempt to make the law work where we want it to work, and to make the exceptions where we want to make them for particular purposes. The answer to the problem is not that suggested by the Conservative party, to abandon capital gains altogether. If we abandon the concept of capital gains altogether we will be back exactly where we were in 1962. We will be back with the same problems that led to the creation of the Carter commission in 1962. Indeed, I would suggest to the minister that we are almost there. The problems of capital gains and the problems of equity in the tax system are as great as they were then.
I see that my time is coming to an end, Mr. Chairman, and I wonder if I might conclude by saying a word about indexing of capital gains. With your indulgence, it will take about one minute.
Indexing has frequently been suggested as essential for capital gains, since many increases are not increases in real value but simply reflect increases in the general cost of living. As long as there is the 50 per cent exemption for capital gains, I cannot see any overwhelming reason for indexing capital property. If we were to move to the full taxation of capital gains, the case for indexing the value of capital property would obviously be strengthened, but only in the context of some more fundamental decisions about the general principle of indexing in the whole of the economic accounting system.
I cannot speak for other parties, Mr. Chairman, but this party is looking for greater leadership from the government in this field and in the field of fiscal arrangements. We want some indication of where we are going. We would like this
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matter to be referred to a committee; we would like tax reforms to be referred to a committee; we would like fiscal tax sharing referred to a committee and the established programs financing referred to a special task force. In all, we would like leadership from the government and an opportunity to participate in the evaluation of these problems so that we might give the kind of constructive advice that we have given the minister on many other matters of legislation, and as we hope to do in the future.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: Mr. Chairman, it is always a pleasure to listen to remarks by the hon. member for Broadview-Green-wood, the finance critic of the NDP. Although he has not been in this House very long, as he says himself, he has certainly been a very vociferous contributor to the debate on financial matters. It will come as no surprise to him that some of us in the Conservative Party do not agree with some of his statements. At times we find common cause with the NDP in matters of the environment or civil liberties, but at other times we have great reservations about their economic theories.
When all the chips are down, perhaps the twentieth century will reveal that one of its greatest fallacies and greatest failures has been the concept of socialism, and that a socialist is someone who does not have much and wants to share it with everyone.
We also listened with interest to a former great member of Parliament and former leader of the Crediste Party when he was here in this House. He was a great orator. I can remember one of his most famous one-liners when he said, "Mr. Speaker, if you take everything from the haves and give it to the have-nots, pretty soon you will have nothing but a bunch of have-nots." I think there is a lot of truth in what Real Caouette said.
The hon. member for Broadview-Greenwood noted in passing that people with high incomes tended to be the ones who benefited the most from capital gains tax. I suggest that that is really a penetrating look at the obvious. What we would like to see, of course, is more people with high incomes so they could be paying capital gains tax. We would also like to see the government be more flexible, and for it to carry on with some of the things that were noted by the hon. member for Kinders-ley-Lloydminster. We would like to see the government carry through with its election commitments, also referred to by the member for Broadview-Greenwood. We would like to see the government do something about changing the capital gains situation on family farms.
I believe, and perhaps the House would agree, that if capital gains taxes are not modified to some extent, and if indexing provisions are not brought in, they are really nothing more than a tax on inflation. They are confiscatory. Ultimately they will have the effect of taking away much of the incentive, much of the private ownership, and much of the capacity to
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own things which have always been and deservedly so, part of the tradition of Canadians.
I believe, the minister opposite would also like to see this done. I believe too that many members in the Liberal Party would have no difficulty-since everything is being predicated on the constitution these days-with a proposed amendment put forward by our party to include the right to ownership of property, and not to be deprived of same, without due process of law, despite some of the rather chauvinistic and unnecessary objections from some provinces, including some with Conservative governments.
It is obvious, as the Prime Minister admitted, that it is very important for him to have the support of the New Democrats. At least he was forthright enough to admit it. But since we are talking about financial matters and some of the aftermath of past polices, such as AHOP, which are causing so much difficulty for the hon. gentleman on the treasury benches opposite, it is interesting to remember that some of these policies which are now coming back to haunt the government, causing it financial embarrassment and causing it to worry about where it will get the money to meet some of its commitments, were the result of compromises the government felt it had to make with the NDP during the period 1972 to 1974. It is interesting to note as well that at least in the constitutional debate the government is forced into this position again.
it seems to me that the opportunity for us to say a few words today ought to be directed toward asking the minister some questions as to whether he is prepared to consider some specific changes. Would the minister be kind enough to take a representation of mine under advisement? It is one I have made before. It does not seek to do away with capital gains tax entirely as the member for Broadview-Greenwood indicated some of us might wish to do. I do not think that is realistic at this time. But I still believe the imposition of capital gains tax has caused Canadians a great deal of difficulty. It takes away much of the incentive which allowed this country to progress far more rapidly in the past than it has done since the tax was introduced. The revenues derived from capital gains tax have not been as significant as the government thought they would be. Capital gains tax has done more harm in stunting the economic development of this country. It has not provided as many opportunities and new jobs as were expected.
I suggest the same kind of mistake is being made with regard to Bill C-48, in changing the depletion allowance. I am not prepared to argue that 175 per cent depletion is necessarily equitable, but I do not believe the option which is being offered by the government in terms of this change in taxation is going to be productive as far as the industry is concerned, or as far as energy self-sufficiency is concerned. I may be wrong. But as I recall, under the existing provisions at least a company, be it a small Canadian corporation or a multinational, has a chance to recover on a non-taxable basis the expense it has incurred in drilling, looking for, or developing new oil wells. Under this proposed taxation arrangement, as I recall, there will be a grant of 30 per cent for exploration wells or 20

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per cent for development wells. But ultimately that grant will be taxed.
1 do not believe that small oil companies, whether they are Canadian or otherwise, can compete with multinationals which have marketing distribution facilities and a capacity to absorb this kind of up-front expenditure. I urge the minister and the government to take a close look at the kind of incentive which is being taken away. I am not arguing that some incentive ought not to have been taken away because the oil depletion allowances were probably overly generous. However, in this case the government is trading the devil for a witch. In a situation like this we will see a counterproductive atmosphere come into the development of the search for petroleum resources; small companies cannot compete.
I have an observation that I wanted to bring to the minister's attention on different occasions. It seems to me the attitude of some auditors and officials of National Revenue could stand some scrutiny from the top. We have all had complaints from constituents, some of which were ill-founded and some of which were based on a sense of persecution which, upon reflection, were really not warranted. Nevertheless I am firmly convinced that officials in National Revenue have become rather arrogant and rather insensitive. They are not exhibiting the same sense of being truly helpful. They do not seem to realize they are the servants of the people of Canada, as they used to be in years gone by. I have watched their work habits. I have watched things that have happened in my constituency. Taxpayers have been forced into litigation. Businesses have been menaced because of what I say, respectfully, is a rather arrogant and perhaps pointless insistence on the letter of the law. With a little discretion and understanding some of these businesses and people could have been saved a great deal of trouble. Indeed, the government would have benefited in the end by collecting more tax revenue.
I think there is something to be said for taking a look at capital gains on securities, in the same spirit as the government is looking at registered retirement savings plans and other benefits to help Canadians save and to prepare for their retirement. There is something to be said for treating the holders of securities of Canadian companies a little differently when it comes time to assess them on capital gains.
I know, and so does the minister, of some companies which encourage their employees to buy stock, sometimes by payroll deductions. Sometimes investors will deliberately buy stock in Canadian corporations for some other reason. Yet these people who go to the bank to borrow money to invest in Canadian companies, are treated exactly the same when they come to sell their securities as if they had shares in American Telephone and Telegraph, or in some other corporation which had no connection with Canada at all.
I would advance the proposition to the minister that if a Canadian can show that he is buying securities in a Canadian company for some worth-while purpose, such as for retirement or to put his children through university, and demonstrates this fact by holding those securities for a period of time, five or ten years, to indicate that he is not a speculator, he should be
treated differently from someone who buys 100 shares in an industrial company only to sell those shares in a week or so to make a quick capital gain.
I think that capital gains taxes can be useful and equitable if applied with a little subtlety. To use another metaphor, they could be used like a scalpel instead of a blunt instrument. When it comes time to examine the tax options, to Canadian-ize, if we are going to use that word, certain sectors of our economy, we should not overlook the incentive that could be granted by using capital gains tax in a different way, to allow Canadians some tax relief, provided they are prepared to divert investment which might have gone into United States stock exchange or offshore to somewhere else in Canada. If they keep their investment in this country, they should be given some recognition and more important, tax breaks for doing this.
I recognize that the government is in a difficult position. It needs all the revenue it can get. It is very easy for us to make suggestions to it which involve saving money on the one hand and spending it on the other. Sometimes we are inconsistent in this regard, and I will be the first to admit that.
However, there is a great opportunity, if we look at the priorities and not fall into the trap that some Scandinavian countries have experienced. I read recently that The Netherlands is also coming to grips with this depressing reality. They have gone about as far as they can go in certain European countries with social programs they have begun since the last war. The next social crunch, if I may use that word, will be when people are suddenly confronted with the realization that they cannot go any further. Such a large amount from the budgets of those countries is being spent on the distribution of social benefits that there is not enough left for creation of the kind of wealth that has to be created, if they are going to continue distributing these kinds of benefits to their people.
One day in this House the hon. member for Broadview-Greenwood, as they say in vaudeville got off a pretty good line. I believe the hon. member for St. John's West was finance minister at the time. He said he had heard of Keynesian economics, pre-Keynesian economics, and now he was looking at pre-Cambrian economics. At the time I thought that some of the things the NDP were espousing were into another kind of economics called the Alfred E. Neuman version, the "What, me worry?" economic theory.


Terence James (Terry) Sargeant: We are not worried about you, Elmer.


Elmer MacIntosh MacKay: You read Mad magazine too. I believe we are coming to a point in our fiscal and financial considerations in this country where, if we are not more selective with what we do, if we do not divert more of our energy and money into departments that create wealth and give Canadians incentives to do something for themselves and our country, and less incentive to stay home and use the social programs to get by, we will continue to sink in terms of relative prosperity in the world.
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The minister knows this has been the case in the last few years. He would be surprised at the support he would get, not just from our party but from people across the country, if he would put a little incentive back into the economy, and a little restraint in terms of some of the social programs. While they may be very nice and very helpful, they are just not affordable.


Mr. Corbett:: Mr. Chairman, I want to take this opportunity to say a few words about Bill C-54 and the implications this legislation, if passed, will have on the economy and the future of Canadians and this nation.
Many items are dealt with in this document. It is a rather ominous document containing a good amount of material. Most of it deals with the mini-budget and the subsequent budget introduced by the Minister of Finance over the past year. As hon. members realize, it has not yet gone into effect despite the fact that the election of February 18 is about to celebrate its first anniversary.
Canadians generally will agree that one of the greatest hoaxes in our history was perpetrated last February 18 when the government was elected on a platform of economic recovery, and condemnation of the previous government's policies and of the previous finance minister's budget of December 9, 1979. They were going to improve the health of this nation. There were innuendoes that this would happen immediately. The fact is that today we have a situation much worse than it was a year ago.
We have record high interest rates. We were roundly criticized for allowing high interest rates when we formed the government. Times have changed. The remedy the Liberals had in mind at that time when criticizing our government no longer applies. Indeed, interest rates now are substantially higher than a year ago.
Canadians were led to believe that this Prime Minister and the Liberal Party could handle things much better than our government. They were led to believe that economic collapse was imminent if the government of that day was kept in place. Canadians were led to believe that everything would be very much better, indeed that the path would be paved with gold and lilacs if the Liberal Party was put back in power.
We have seen what happened. We have spiralling inflation. If it is not brought under control, we will be on the verge of a recession, if not a depression. This is all pointed out by the present high interest rates, the tremendous unemployment this country is facing, and the fact that bankruptcies in small businesses are up substantially over last year. We can live with an increase of 1, or 2 per cent. That could be a natural phenomenon. However, small business has faced an increase in bankruptcies in this country of over 17 per cent compared with last year.
What is the government going to do about this? In the mini-budget it promised a Small Business Development Bond. This gave business some hope for the future. They could go to banking and financial institutions and, on the strength of the words of the present finance minister, avail themselves of the Small Business Development Bond within the very near future.
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Business took heart from that. Months and months later we find ourselves in the situation where the Small Business Development Bond act has not yet been passed. An extension was given last year for three additional months in 1981. We see now that at least one of those three months has lapsed. Where are we going from here? It is very, very difficult to tell. What is the cost to government of the Small Business Development Bonds? It seems the government is not in a position to let us know.
We took heart in various sections of the country from the government's promise to allow us a manufacturers' tax incentives program. In my own province of New Brunswick, in my constituency of Fundy-Royal, there were many people who held high hopes that the manufacturers' tax incentive program would be one which would encourage manufacturers to locate in all sections of the country where development was down. Indeed, there were many people, including myself, who lauded the decision of the government to include that particular section in its budget. What have we found has taken place since the budget came down? We have discovered that this was not to cover all areas which are recognized as being in need of incentives, recognized as having the need for additional manufacturing facilities, and recognized as being generally regions of high unemployment, low family incomes, and low mean incomes. We found, rather, that the program was to be utilized as a tool to satisfy particular sections of those areas.
I find it very difficult to accept that the only regions it seems which were to receive this manufacturers' tax incentive program were regions represented by members of the current government party. I find it difficult that this sort of petty politics could possibly inject itself into the future of a region of the country which so badly requires the sympathetic consideration and ear of a compassionate government. Indeed, that is the way it is. There are only five areas in the province of Nova Scotia which are eligible and qualify for the manufacturers' tax incentive program, and all of those areas are represented in this House by members of the Liberal Party.
We have a Minister of Finance who lays the blame for our economic problems and woes at the doorstep of the Canadian people. We, as the people of this nation, have no one to blame but ourselves and our indiscretion in spending in our wanton way and our desire for greater and better things. We should be tailoring our cloth to suit our needs, says the Prime Minister, in so many words. I would suggest to those gentlemen that they try this on some of the fixed incomes the elderly and the poor have to suffer in this country.
The energy tax credit program which was such a vital and important part of the Crosbie budget has not been utilized in the present budget. What a blow this is to those people who depend so heavily on oil for their heat, warmth, and cooking, particularly during this winter which has been so desperate and so drastically severe. There is nothing in the budget to help these people. As a matter of fact they are now being treated to an increase in taxes on their heating oil which was

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not called for under the Crosbie budget. These people are finding it very difficult to cope with the situation, and that is absolutely understandable.
What do we find in the meantime? We find the present policies of the government are devoted to driving initiative, jobs, and exploration from this country to the United States and out of existence altogether. We do not see the initiatives being taken in this country that are required to get Canadians to work finding energy within our own boundaries, energy which we know is there.
I urge the minister to take a look at the government's energy policy in reference to financing exploration, now that it has determined the energy companies and the policies of this nation are moving toward nationalization. It is in the government's hands to determine the direction and to create a climate which will encourage investment in energy exploration. I encourage the government in this regard.
In Albert county in New Brunswick, which happens to be in my constituency as well, there have been known sources of oil shale for a good many years. Natural gas has been used in the township of Hillsborough for years, piped into the homes, but what initiative has the government taken to determine if it is economically feasible for Canadians to extract the proven resource of 280 million barrels of oil in the Albert county shale, just in one square mile alone? Nothing has been done to encourage any exploration work in this area, and that is a shame.
It is thought that in Albert county there could easily be something in the vicinity of 15 billion barrels of oil in that shale, but there is no incentive to extract it. That amount of oil is equal to the amount proven in the total Hibernia field off Newfoundland. What has been done about it? I have talked about it in this House of Commons on many occasions. The provincial government has made representations to the federal government for assistance, but it does not look very good for the future of the oil shale or the natural gas reserves in Albert county at this time.
I see that the time is approaching five o'clock, Mr. Chairman. Is it your intention to close debate at this time? Perhaps I could call it five o'clock.


The Assistant Deputy Chairman:: The Chair will recognize the hon. member for Fundy-Royal if he is present at eight o'clock in order to continue his remarks.
It being five o'clock it is my duty to rise, report progress, and ask leave to consider the bill again later this day.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Central Nova (Mr. MacKay)-National Security-Complaints by members of security service- Alleged discrimination; the hon. member for Don Valley West (Mr. Bosley)-Finance-Policy respecting inflation and interest rates; the hon. member for Winnipeg-Birds Hill (Mr. Blaikie)-Health care-Use of pre-natal screening kits.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, notices of motions and public bills.



PRIVATE MEMBERS' MOTIONS


Allan Frederick Lawrence: That the Standing Committee on Justice and Legal Affairs be authorized to review the firearms control provisions, sections 82 to 106 inclusive of the Criminal Code of Canada, and that such review extend to all aspects of the firearms control program and include the hearing and consideration of the views of the interested persons and organizations and to make recommendations with respect to any amendments, alterations or modifications thereto that appear to the committee then to be necessary or desirable;
That the committee have power to adjourn from place to place within Canada; and
That the committee be empowered to retain the services of expert advisers and to commission studies or research to assist in its work and that it also be empowered to retain such professional, technical, clerical and stenographic help as may be required.
He said: Mr. Speaker, this private member's motion standing in my name in essence asks that this House authorize a subcommittee of the Standing Committee on Justice and Legal Affairs to investigate, hear briefs, cross the country and employ counsel and advisers respecting the legislation commonly known as gun control legislation which is now part of the Criminal Code. 1 think it is essential that we now do this. I think the time is ripe for this Parliament and, as a matter of fact, this government, to find this an ideal vehicle to plumb the many questions which exist with respect to the administration of our gun control legislation.
Second, this would be an ideal vehicle for taking a very hard and searching look at the whole philosophy and concept of our gun control legislation and, obviously and most important, to
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figure out now, after three years of operation, whether it is achieving its purpose.
I think a little history is called for. In August of 1977 Parliament approved very comprehensive revisions to the gun control provisions of the Criminal Code. It was at that time and continues to this day to be one of the most sensitive issues to come before Parliament in recent years. It certainly is in the whole law and order field, in any event.
Hon. members should know that very large numbers of citizens of Canada are very directly affected by this legislation. There are more than three million gun owners in Canada, and gun owners and, I suggest, certainly non-gun owners alike are vitally concerned about the level of violence in our society which is related to guns and the use of guns.
The key provisions of the 1977 legislation established a system which required any person over 16 years of age who wished to acquire-by purchase, by borrowing or by trading- a firearm, to obtain a firearms acquisition certificate, commonly known as an FAC. A screening system was established to identify those with criminal or violent records and, obviously, a system then to deny firearms acquisition certificates to those people. That is the principle and the theory. In practice, of course, I feel-and I would like to hear some rebuttal-that that system has not worked and is not working, simply because those with that type of record or history are not stopped by this system. I am not talking about the spontaneous marital difficulty in which somebody reaches into a cupboard for a shotgun or a .22 to settle an argument by that means; I am talking about those who have histories of violent criminal activity or those with histories of using guns during crime. I suggest that in practice those latter people are the very people it does not affect, although it is supposed to in theory. If it does not affect those people, it does not affect anybody because it cannot possibly affect those whose spontaneous reaction to an argument is to reach for a gun for which they may already have a certificate.
The system simply does not work against those who have that record of criminal activity solely and simply because they circumvent the system by paying no attention to it. They ignore it. If someone is going to rob a bank with a gun, I suggest that he does not run down to his friendly local police station to get an FAC ahead of time.
Under the FAC system an individual does not need a certificate in order to possess any gun he acquired before 1979. I suggest that this is a very glaring practical gap in the legislation facing the police today. How do they know, for instance, when a person acquired an older gun? I suggest that most of the guns in use in Canada today were acquired long before 1979.
To assist the police in solving some of the problems they have-and they are very grave and gross problems-the police were given almost unprecedented wide powers to search for and seize weapons without warrant. I suggest that this has been criticized very severely in many civil rights, legal and justice quarters of this country. It is an unprecedented provision to write into legislation such as this, and I suggest that
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this is another area of scope which should be looked at very closely by means of an inquiry.
The administration of the whole firearms acquisition certificate system was turned over by the federal government to the provinces. Most provinces issue FACs from local police offices, with the notable exception of New Brunswick where all such certificates are issued from a central processing office, so therefore the main bulk of the administration-as far as the public perception is concerned in any event-falls on the shoulders of local police officers in local offices.
We all know that the enforcement of the Criminal Code itself is a provincial responsibility. However, due to the rather unusual administrative requirements of the firearms provisions, and especially the whole system of issuing firearms acquisition certificates and issuing business permits, the federal government of the day entered into a federal-provincial agreement-into many federal-provincial agreements, actually-whereby deficits incurred by the provinces will be paid by the federal government. As far as I can ascertain, there has not been a report since 1977 respecting the amount of moneys required in respect of this whole system. How much has been spent, for instance, by municipal police forces across this country in respect of firearms acquisition certificates and their administration? How much has been spent by provincial forces or out of provincial treasuries? We have never really received a report on how much the federal government has spent in total in respect of this whole system.
We have never been told which provinces have deficits and how much of a deficit they have incurred. I suggest to you, sir, that that information is available to the government, that it should be released, and that it should be released to a parliamentary inquiry.
In 1977, and again in 1979, it was estimated by the federal officials in the Department of the Solicitor General that a total of 600,000 to 700,000 FACs would be issued annually. Since this program has been in effect we have only had two reports to the solicitors general which show a significantly lower number than the number announced. In its first year, for instance, only 245,000 certificates were issued, not the 600,000 or 700,000 which we have been led to believe would be the number. Why the difference? What has happened? Were the first estimates-the only estimates we have had-that far out, or has there been that much of a decline in the acquisition of new weapons in this country?
What are the 1980 figures? The minister must have them by now. 1 hope that the parliamentary secretary, who, I would assume, will speak in this debate, has those figures and will give them to us. However, Mr. Speaker, I suggest to you that they are far out of line with the original estimates which were given to the House in 1977 when the legislation was passed. Either something has happened in the meantime, or it is the effect of the legislation, although I do not think so. Obviously that legislation was passed by the House with the misleading information to show that it was that much of a problem and

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that there were that many weapons traded each year since that time.
In 1979, for instance, there was a six months' backlog in the processing of applications to acquire firearm acquisition certificates. Presumably these have been cleared up, but a veil of secrecy has been drawn and a great deal of non-information has been coming out of the Department of the Solicitor General with respect to the time it now takes to obtain the certificates. I ask whoever will be replying for the government today how long a person has to wait for a certificate to be issued to him, provided he has no criminal record or no record of violent disorders. The National Advisory Council on Firearms was asked by the Department of the Solicitor General to provide independent advice on the program to the government. Is it still in existence, and where are the reports? Why have we not heard the concerns of this group? A veil of secrecy has been drawn over the whole matter of gun control registration in the last little while, and it is time that many of these concerns were answered.
I suspect that there is a great number of problems regarding administration, and I suspect that there is a great number of suggested amendments to the legislation which are ready to be processed through the House. Yet we have heard absolutely nothing about them. By the middle of 1979, without any of the confirming statistics which have since become available to the Solicitor General (Mr. Kaplan), 13 amendments to the legislation were identified as being needed. Here we are well into 1981 and nothing has been forthcoming, no statement, no statistics. For instance, some of the amendments identified well over a year and a half ago included such matters as safety training requirements under the act. Surely if we are going to be burdened with this type of legislation there should be an objective in view with regard to the acquisition of new weapons in this country by individuals, and some requirements with regard to safety training. This whole aspect has been ignored by the government. I suggest to you, Mr. Speaker, that amendments with respect to that aspect have been ready for some time now.
Another real problem has been the whole matter relating to security firms in this country. An FAC is issued to an individual, not to a company. Most security firms require the ownership and use of a weapon, which is unfortunate, in my view. It is not possible, as has been suggested to this government by provincial governments, for some type of a blanket permit to be issued to these security firms?
Customs tariff amendments have been ready for some time as they relate to the importation into this country of firearms by Canadian citizens, but absolutely nothing has been brought forward regarding this by the government. Then there is the matter of dealing with non-residents who attempt to import weapons temporarily into this country without an FAC. This matter has not been tackled at all. I suggest to you, Mr. Speaker, that this is a very real and continuing problem to the tourist industry in this country in so far as American hunters are concerned. No matter who is involved, a certificate is required in this country for anyone carrying a gun.
What do Americans do who bring guns across the border temporarily? Do they apply for an FAC? If they apply for an FAC, do the police forces in the country check their medical records or their violent tendencies, if any? I suggest that a double standard is being applied with regard to Americans who come in and Canadian citizens. 1 am not even sure that the government is enforcing these provisions of the act. All this is a can of worms. If it did enforce them, there would be a great anguished outcry from the tourist outfitters and from the whole tourist industry in the country. In many ways the government has shut its eyes with regard to the problem of non-residents who bring their weapons into this country temporarily for a lawful purpose.
Then there is the whole question of appeals, another matter which has to be dealt with. There is simply no appeal provision in the act at the moment with regard to those who are denied a free firearm acquisition certificate. There are other questions and other procedural problems in respect of the legislation regarding appeals. That is another area which should be considered very carefully by a parliamentary committee, I suggest. More problems have surfaced now since the first phase of that legislation was proclaimed on January 1, 1978.
The time for a complete review of the administration of the act is now long overdue and should be dealt with as promptly as possible. The proper body to deal with it is a parliamentary committee. The whole purpose of the legislation, the whole philosophy and the whole concept behind it, are to reduce the number of crimes committed with guns in Canada, and after two full years since the legislation was passed a valid question should be asked by all of us. The question is whether this legislation is achieving that purpose. I must say to you, sir, that I have grave doubts that it is. It seems to me to be a cumbersome, awkward, and expensive system. But I would like to know for sure. I would like to learn from those who must enforce it and from those who have a very expert and detailed knowledge of it.
The first two annual firearms reports-the only ones we have ever received-for 1977 and 1978 do not reveal any evident trend toward a sharp reduction in the violent crime rate. The statistics for early 1980, which we now have, show that violent crime, crime connected to guns, is on the upsurge in this country. Just last week the report of the Metropolitan Toronto Police Commission for 1980 was released. For instance, in metro-Toronto alone crime is up 9.4 per cent, most of which is violent crime. In the city of Toronto during 1980 ten citizens were killed during acts of robbery, compared to only one in 1979. Out of a total of 48 homicides last year in metro-Toronto, 18 people were shot to death. Robberies with firearms increased 23 per cent in metro-Toronto in 1980-386 in 1980 compared to 289 in 1979.
I end by saying this to you, Mr. Speaker. The Trudeau government in 1979 made a public commitment to carry out a review of the firearms control provisions of the Criminal Code. It was never done by the previous Liberal administration. The
February 2, 1981

Clark government confirmed that commitment and, as solicitor general in that government, I publicly stated that it would be done. At that time 1 put on the Order Paper the very same motion which I put forward today. Some of the most pertinent statistics relating to violent crimes in this country have been hidden from view. But they are available. There is no need for further time to draw conclusions. 1 think it is time now for a parliamentary review by a subcommittee of the Standing Committee on Justice and Legal Affairs. This would permit the provinces, the federal officials, the RCMP, individual groups and individuals, to present briefs and comment on legislation which, I suspect, is not working. Most of all, sir, that inquiry would be open and available to us all.


Some hon. Members:: Hear, hear!


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State (Small Businesses)):: Mr. Speaker, I am pleased to have the opportunity today to speak on this motion of the hon. member for Durham-Northumberland (Mr. Lawrence). I must suggest that perhaps, like all existing legislation, it has to be updated from time to time.
I believe that the implementation of Bill C-51 in 1977 was a very big step to take. Perhaps people, hunters and gun owners particularly, were of the opinion it went too far. The passage of that legislation was certainly marked by some controversy. The successful though controversial amnesty recall program took place in November, 1978. Then the introduction of the firearm acquisition certificates and the business permit systems took effect on January 1, 1979. It must be noted, however, that the recall was regarded as very successful, if you talk to various police officers. The rank and file of law-abiding citizens were not affected by it.
As significant as those changes were, I think they should be reviewed in the context of the history of firearms control in Canada. It is now widely appreciated that Canadian law has controlled firearms in one manner or another for well over 100 years. 1 well remember during the Second World War when all firearms had to be registered. You had to sign to buy ammunition. The first permit system for the carrying of a small arm outside of one's residence or place of business was introduced in 1882. By 1934 the law required the registration of all hand guns. A change in the law in 1968 created three classes of weapons in Canada: prohibited, restricted, and unrestricted.
I bring this brief history to the attention of the House because I believe it sheds some light on why Canada has generally enjoyed a history of responsible use of firearms since we have advanced from a frontier society, which to a large extent depended on firearms. The conditions in Canada are a far cry from what we see in other countries around us at this time. The changes enacted by Parliament in 1977 continued the promotion of the responsible use of firearms, in the Canadian tradition. The one big change which was effected was the firearm acquisition certificate.
As I mentioned, the 1968 law created three classes of weapons: prohibited, restricted, and unrestricted. The condi-
Firearms Control
tions attached by that legislation affected the acquisition and use of restricted guns. There were no controls imposed on the acquisition of either long arms such as shotguns or hunting rifles. The criminal law amendment legislation in 1977 introduced control of long arms to the extent of requiring individuals wishing to acquire them to be screened by the police to ensure that they did not have a criminal record or a history of mental illness associated with violence.
I received a letter recently from a constituent of mine. She is now a married lady, and she spoke about this matter. She related to me an experience she had with a friend, her married brother and her sister-in-law one evening. A man, such as I referred to previously, with a history of mental illness, shot her friend when in the car with the rest of them. It is a tragedy she will never forget. This is the type of instance to which this regulation was intended to apply, not to the normal rank and file person who likes to hunt.
I like to hunt, on occasion. I was not affected by this legislation. Perhaps, in a sense, there is a reason why I was not affected. My first experience as a hunter, as one who loves the outdoors, was not just with the sport of hunting but the need for predatory control of the foxes which were wantonly destroying the poultry in our area. We used to raise those birds on the range. A few years after that we had a rabies epidemic. The hunters in the area would organize a fox drive in order to eradicate the foxes and this problem. A few years ago two of my employees had to go through a series of vaccination shots for rabies. Not long afterwards we all became very conscious of the need for organized hunters and the help they provided to the farmers and society while we were constantly trying to rid the countryside of those animals which do carry rabies.
There is another area to which this also applies. In mid-November we had a baby calf killed in pasture by a brush wolf. Naturally, the cow, on mother's instinct, hid the calf away during the daylight hours and she would return to it in the morning and the evening to feed it. One night we heard her bawling. We went to find her and we discovered the baby calf dead. So there is a need for the farmer and the hunter to have weapons available to them. This is certainly not restricted, in a sense. But if there is a backlog of people waiting for acquisition certificates I hope it will be resolved.
Another reason why I am interested in this legislation is because, when I was a teenager, just after World War II, I was involved in a fox hunt in which a friend of mine accidentally shot himself. It was a tragedy in the community which left a wife and three children. The real tragedy was that this man was a war veteran. He had been all through World War II and many battles. Then, as the result of one little accident, his life was ended. That shocking incident made me volunteer to become an instructor in the use of firearms. I wanted to see that the young people of my area were properly instructed in the use of firearms. Yet, this war veteran who had handled firearms during the battles of the war had his life stamped out by one simple mistake.

February 2, 1981
Firearms Control
Another area about which I am concerned is the safe storage of firearms and ammunition. Part of the program of instruction dealt with the prime concern that every owner keep firearms out of the reach of children, by keeping the guns locked up in a place separate from the ammunition. I understand the concern of the hon. member who introduced this bill. According to his interpretation of the law, if somebody's home was broken into and the guns and ammunition removed, that person can be held responsible.
There was a case just a few weeks ago in which a policeman was shot and killed. The suspected individuals were apprehended near Orillia, after a trail of crime with ultimate tragic results which began near North Bay. I do not know whether the involved weapons had been properly stored, or the premises in which they were kept were forcibly entered. I suggest a review of this case could indicate necessary amendments or changes to relieve these problems. We should also review the matter from the standpoint that a break and enter occurred.
An area of concern to many hunters, particularly those in my area, is the right of the police to search and seize if they have reason to believe that the situation is dangerous. I understand the feelings of the policemen who must enter a tense situation, whether domestic or otherwise. The police are empowered to search for and seize guns in emotionally-charged situations of conflict. It enables them to deal effectively with the kind of situation which leads to almost two-thirds of the deaths caused by firearms each year in Canada. The intent of the legislation was to ensure that officers exercising such authority would explain to a court why it was impractical to obtain a search warrant in advance.
I understand the feelings of people who might be subject to search and seizure. I hope in the review which is under way that this particular section will be examined in detail, in order that it does not infringe upon the rights of normal law-abiding citizens. No doubt there are arguments for and against this point. I can understand the situation where a policeman is called to a crime as the result of some domestic dispute. Such an incident occurred this Christmas in my own village. A neighbour had visited another neighbour. I am not sure whether it was an emotional disturbance or whether it arose as a result of a celebration. The neighbour demanded a gun and was refused. The wife ran next door to call the police. In the meantime the fellow got a heavy rifle. When the unsuspecting police knocked on the door, it was opened and the neighbour fired. Luckily the police were not hurt, but an innocent bystander was injured.
I understand why legislators feel there must be an element of protection for persons who may be emotionally disturbed. The individual to which I just referred would never have considered doing such a thing under normal circumstances. Even though he went to another home to obtain a weapon, an innocent bystander was hurt.
I hope the evaluation being conducted by the Department of the Solicitor General considers such situations and will employ
more acceptable and better-understood solutions for people in Canada who own weapons. I understand the study is examining the effects of the firearms provisions of the Criminal Code and that it is not merely confined to changes to the law passed in 1977. The review promised by the Solicitor General (Mr. Kaplan), following the completion of the evaluation study in 1982, will affect the review of the entire history of firearms control in Canada.
This study is a very important first step in the review. I hope to play a part in any further review and to reflect, as a Member of Parliament, the wishes of my constituents, taking into consideration the part played by law enforcement officers, average citizens, hunters, land and property owners. While I appreciate the strong interest of the hon. member for Durham-Northumberland on this subject, I hope he understands the review would not be as useful as it would with the results of the study at hand. The time to make a decision on whether we should proceed with a review is when the evaluation study is made public.


Hon. Bill Jarvis (Perth):: Mr. Speaker, I had not intended to speak on this matter, but I have the sinking feeling that for some reason-and 1 do not wish to be accusatory-government members intend to talk this bill out. Frankly, I find that very disturbing; I might even be so naive as to say that I find it rather surprising. I compliment the hon. member for Durham-Northumberland (Mr. Lawrence) on introducing the bill. 1 believe that a review is necessary. This bill is consistent with the measure put on the order paper by the hon. member when he was solicitor general. At the time there was not a peep of complaint from the opposition party of the day.
If I understand the hon. member for Lambton-Middlesex (Mr. Ferguson), the review is premature in light of the ongoing study in the Department of the Solicitor General. I do not wish to criticize public servants in that department who are allegedly conducting this study because I do not know what they are doing or whether they received direct instruction from the Solicitor General (Mr. Kaplan) to do a complete and expeditious study of the legislation under the Criminal Code as it affects gun control. I have no idea, and I will likely never find out.
However, rather than use this as an excuse to postpone a review, I would far sooner compare this situation to a similar motion which dealt with Canadian penitentiaries. Had we waited for the Department of the Solicitor General to conduct a review of the penitentiaries, we would all be serving life terms because it would never come. At that time a Liberal government was in power, so I am not being partisan.
At that time we were able to prevail upon the then solicitor general to say, "We have a Standing Committee on Justice and Legal Affairs, so let us give it a House order which will enable it to establish a subcommittee. Let it travel, let it call expert witnesses, and let it have the necessary staff."
February 2, 1981

Those of us who were exposed to that process said to ourselves at the completion of it, "This is the way the House of Commons and parliamentarians should work." We did not say that as Liberals, as Conservatives or as members of the NDP, we said it as parliamentarians.
At that time I detected a great lift in the morale of parliamentarians because they were part of a process that was not partisan. They travelled night and day and worked night and day in not too attractive surroundings and in an atmosphere not too conducive to morale, that of the Canadian penitentiaries.
I thought the report that was produced was an outstanding piece of parliamentary work. My friends opposite were members of that committee and there was a member of the NDP, a bitter political foe, Stu Leggatt, who now serves in the British Columbia legislature, who virtually put his heart into the report.
I have a terrible feeling now that there is some resistance over there-for what reason I do not know-to permitting a good and viable institution, a subcommittee of the Standing Committee on Justice and Legal Affairs, to fulfil a mandate not to criticize, not to change the legislation, but to review it.
We have all been the recipients of complaints about this legislation. I am concerned when I hear of the number of violent deaths increasing in metropolitan Toronto because the same might happen in my home town of Stratford. I have not yet seen the report of our police force for 1980.
I am sure my colleague, the hon. member for Northumber-land-Durham is not one to say, as I am not, that this is all bad or this is all good. He said that we should create a vehicle in which parliamentarians could work together diligently and effectively to review this legislation. The operative word-and it was used twice-is "reviews"; not to change, not to amend, not to abrogate, but to review.
We all enjoy partisan politics-I as much as anyone-but surely in the context of having the president of the penitentiary committee before us, the government will not be so inflexible and dogmatic as to prevent that vehicle from instituting what I am sure hon. members on all sides feel is a very worth while project for parliamentarians and not necessarily only for public servants.


Some hon. Members:: Hear, hear!


Miss Aideen Nicholson (Trinity):: Mr. Speaker, 1 am pleased to take part in this discussion, and I welcome the initiative of the hon. member opposite in raising this matter again.
When Bill C-51 was introduced in 1977, it was necessarily controversial and there were strong differences of opinion between those who wanted more rigorous gun controls and those who wanted fewer or no controls. In my constituency at that time people were very exercised because of a murder which had been committed by a person who was obviously mentally disturbed. He was able to buy a gun without question, took that gun and shot some innocent passersby. I
Firearms Control
remember very vividly the strength of the convictions and the views of those who felt that there surely was a case for making it extremely difficult for people to obtain guns.
At the same time, a colleague from British Columbia received a letter from a farm wife who was very worried in case the government made it too difficult for people to buy and store guns. This farmer wrote about a situation where a wolf had come on her property and she was able to save her child's life, only because she had immediate access to a loaded gun.
These regional differences had to be reconciled at that time and because there was no way to reach a solution which would be satisfactory to everyone, the government undertook to continue reviewing and evaluating the program.
A three-year evaluation and study is now being done under the aegis of the Solicitor General (Mr. Kaplan) by a consultant firm in co-operation with the provinces. I understand it is a very broad study which will examine all firearms provisions in the Criminal Code, not only the amendments put in place by Bill C-51.
The final report will be available in 1982 but there will be two interim reports. I suppose the question before us today is whether the reference to the standing committee recommended by the hon. member for Northumberland-Durham (Mr. Lawrence) is more useful if done now or when at least the interim report is available.
Those of us who were dealing with Bill C-81 in many cases found ourselves somewhat handicapped by lack of statistics. For instance, Statistics Canada did not start collecting data on a regular basis on the use of firearms in connection with crime in general until 1974, even though there were useful figures available before that on homicides involving firearms.
Although Bill C-51 was introduced in 1977, the changes to the restricted weapons system came into force on January 1, 1978, the amnesty recall program was in November, 1978, and the firearms acquisition certificate and business permits system took effect on January 1, 1979. In effect, if there were a reference to the standing committee at this point, we would be dealing with the experience of two years and would be without the benefit of the interim report on the study.
As the hon. member for Lambton-Middlesex (Mr. Ferguson) pointed out, Canadian law has controlled firearms in one manner or another for more than 100 years. This is something which seems to be lost sight of because many people think that Bill C-81 was the beginning of firearms control in Canada. The first permit system for carrying a small arm outside one's residence or place of business was introduced in 1892, and by 1934 the law required the registration of all handguns. Controls on long guns had to wait for the 1977-78 amendments, although there were some changes in 1968.
Canada is fortunate in having had control of possession and use of small guns for the past 50 years, and it is important that these controls be maintained. The low handgun ownership rate probably accounts for the relatively low rate of homicide by handguns. If handguns are not readily available they cannot be stolen, misused, accidentally used or used for suicide; and

February 2, 1981
Firearms Control
suicide has to concern us as much as the use of handguns in murders, whether criminel murders or family murders.
If the level of ownership of handguns is very low, citizens will not feel they have to acquire them for protection. We have seen the unfortunate situation in the United States where law-abiding citizens feel that they have to own handguns for protection. In some cases, those guns are used against them by robbers.
Long guns, however, are now playing a significant part in homicides. It is reckoned that about one-third of homicides in Canada are committed with long guns. The new controls instituted in 1977 do at least provide us with a more effective way of limiting the number of those homicides. Perhaps it is particularly important to be concerned about long guns because they can be sawn off and used as handguns. Sometimes the ammunition for long guns is interchangeable with other types of ammunition. Controls tend to emphasize that any type of gun is dangerous and must be handled with care. This is not to impose unnecessary restriction on sportsmen who use their guns responsibly. In fact, much of the public's education on the use of guns has been initiated by sportmen's associations. One program in particular, organized by the province of Ontario in conjunction with sportmen's associations, is considered to have had important effects in reducing accidental deaths and injuries from the use of long guns.
As the member opposite pointed out, many people are concerned about the human rights implications of the present law. Of course, this is always a very difficult judgment call to make. The law gives police authority to search for guns in certain cases of domestic disputes when they have reason to fear a person is out of control and may be in possession of a gun. An officer who uses this authority is required to make a return to a court explaining why it was not practical to obtain a search warrant in advance. Needless to say, we would not want to see any further erosion of the principle that one's home is a place where a person is entitled to privacy. On the other hand, if an officer's action prevents a murder or a suicide, there would be a very grateful family.
Two-thirds of all killings by firearms in Canada still occur as a result of family disputes or so-called crimes of passion. These are dangerous situations, emotionally charged usually as a result of an issue between people who know each other well.
The question of suicide also arises in many of these cases. I agree it is a difficult judgment call for the officer. If one can find some better way of not only ensuring the protection of people's privacy, but also protection of human life, perhaps we should look at this again.
The question of safety continues to be an important one. When citizens become concerned about gun laws, they think primarily of guns being used by criminals in the course of other crimes. The last figure I have been able to find for that shows that about 7 per cent of killings as a result of gun use occur in the context of other crimes.
The amendments to Bill C-81 provided for the courts to impose sentences in the case of people in possession of a gun while committing another crime. The courts do seem to be using this provision which provides for punishment after the crime, but of course does not deal with the more important question of preventing such crimes.
Firearms acquisition certificates are considered generally to be reasonably hard to obtain in the sense that they cannot be obtained by a person on impulse. Evidence of character must be provided. However, criminals will always have their own sources in one way or another to obtain firearms. I am not sure that one can provide legislation to prevent any and every illegal act. It does seem as though the amendments which have been put in place by Bill C-81 up to now have provided us with improved controls and as well some useful mechanisms for their continuation.


Mrs. Celine Hervieux-Payette (Parliamentary Secretary to Solicitor General):: Mr. Speaker, I am pleased to reply to the few remarks made by my colleague, the hon. member for Durham-Northumberland (Mr. Lawrence). First 1 would like to give him some statistics since he claims it has become urgent to review the current legislation which has been in force for only a few years. I would point out to him that 18 murders were committed in 1975. I will quote a Statistics Canada publication which shows that in 1979 there were nine murders committed with only one type of firearm. It is a table entitled "Number, type of firearms and murders, by region and sex of victim, 1975-1979". I fail to see how anyone can conclude that such a study is urgent, since figures reveal that the total amount of murders with firearms did not go up but down. Be that as it may, Mr. Speaker, I would suggest to my colleague that our intention is not to delay until doomsday a study which we believe is necessary, since it is now being conducted by an independent firm which will submit its report to the government in 1982. I think that the government is being dutiful in discharging its responsibilities. When the legislation was passed the minister specified that indeed it would have to be reviewed. The current study, which will take a few years if it is to mean anything at all, is being carried out by an independent firm. I do not quite see how the Standing Committee on Justice and Legal Affairs could study the same issue at the very moment when other individuals, who are totally independent and without any political interest, are conducting the same study in a scientific fashion.
I might also point out to my colleague that the Standing Committee on Justice and Legal Affairs must now direct its efforts toward the access to information bill and I think that measure needs the close scrutiny of the committee members. I sit on that committee, and I will make it my duty to give it the best of my knowledge and to participate in the study of such an important piece of legislation. That is why we on the government side believe that undertaking such a study would be premature. On the other hand, I would like to tell my
February 2, 1981

colleague that although that subject is being reviewed by experts outside the government, it might be studied by the committee next year. I think it is at that time-


The Acting Speaker (Mr. Blaker):: I apologize for interrupting the hon. parliamentary secretary, but it is now six o'clock. [English]
It has been suggested, with the consent of hon. members, that we might move to Committee of the Whole, so that when the House returns at eight o'clock it will then be in Committee of the Whole.


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in Committee of the Whole of Bill C-54, to amend the statute law relating to income tax-Mr. MacEachen-Mr. Blaker in the chair.
Denis Éthier: It being six o'clock, I do now leave the chair until eight o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Cyril Lloyd Francis: The House again in Committee of the Whole for the study of Bill C-54, to amend the statute law relating to income tax.

When the committee rose at five o'clock, clause 1 of the bill was under consideration. The hon. member for Fundy-Royal had the floor.


Robert Alfred Corbett: Mr. Chairman, at five o'clock I was concluding my remarks with regard to the potential of the oil shale and natural gas fields in Albert county of New Brunswick. I was explaining how unfortunate it was that exploration investment money was being driven out of this country by the policies of the government. I had asked the minister to reexamine the policies to comply with the requests of provincial authorities, as well as those 1 have made at various times in this House, and to give some thought to exploring, and possibly exploiting, potential oil in the province of New Brunswick.
Income Tax Act
I wish to deal with an extraordinary group of people throughout this country. They form a substantially small group compared to the manufacturers and others with lobby groups that are heard. This group of individuals is critical to the nation. They farm the land and grow the food to feed Canadians.
This group is facing undue hardships. Interest rates are rising, apparently uncontrolled. The government has demonstrated a lack of interest in the problems they face. They must deal with rising fuel costs, labour problems and other hardships. They should be given special consideration.
If interest rates cannot be controlled, some consideration should be given to the difficulties in which they find themselves. They are experiencing dwindling profits, if any at all. We will be in dire straits if this group of very valuable individuals, the small farmers of the country, is no longer able to carry on because of the financial difficulties it is experiencing.
Assistance could be given in a way such as was suggested by the previous government. I refer to capital gains considerations, a matter which has been raised on several occasions by my colleagues. Members of the party to my left made reference to certain individuals in this party who are in favour of abolishing capital gains. I would classify myself as one of those. It is true that those who have money are able to make more money out of circumstances such as that. However, what is wrong with a climate where people with money are prepared to invest it at home so that other people can work, feed their families and enjoy all of the good things which this country should be able to provide for them? Unfortunately, what we have in the mini-budget and budget is a conglomeration of political wing-dingery which will not come to grips with the problems facing the nation. This nation has the greatest potential of any on the face of the earth. However, we find ourselves in dire circumstances with a very bleak future. There must be a change in rationale.
I ask the minister to re-examine these policies which are driving this country down the path of economic and social chaos, policies formed over the past number of years and still fostered by the government. We need new and innovative policies to lead us out of this dead end street which can only lead to economic and social collapse.


Peter Elzinga: Mr. Chairman, as this is the second opportunity I have had to speak on clause 1 of Bill C-54, I will be fairly brief. There are a few matters I want to place on record prior to the in-depth clause by clause study of this legislation. I want to review with the committee a couple of motions under Standing Order 43 which I had the pleasure to move and to make some representations in the hope that the government will take action in these areas. It is obvious there is a great deal of concern among all Canadians over the inaction of our friends opposite. We find in reality that the budgetary proposals they have brought forward will do very little for many sectors of our society. This government has set a number of records in its term of office; a number of records of which it

February 2, 1981
Income Tax Act
should not be very proud and a number of records it should bring forward legislation to counteract.
When we view the record of this government, we find under this administration we have record high interest rates, record high government spending, record high budgetary deficits, record high unemployment, record high taxation, record high inflation, and our dollar is at its lowest level in years. It is for that reason I moved my motion today.
We note from the reports brought forward by the Department of Consumer and Corporate Affairs that a record number of individual enterprises, businesses, individuals and corporations are facing bankruptcy in Canada. The figures that department has come forward with show that over-all bankruptcies in Canada were up some 17.3 per cent in 1980 as compared to 1979. As far as individuals are concerned, bankruptcies are up some 23.4 per cent, and business failures are up some 28.9 per cent from a year earlier. It is because of the inaction of this Liberal administration that so many sectors of our society are facing the difficulties they are facing today.
We brought forward a number of initiatives in the budget we presented when in government, and I am happy to see that a number of those initiatives have been accepted and were included in the budget recently brought down by the Minister of Finance.
There is one segment of our society which may be more notable than others on fixed incomes facing severe problems and difficulties, that is, the single parent sector. That sector accounts for approximately 9 per cent of our family population, and about 50 per cent of these individuals who are single parents have income levels below the poverty line. I should hope the government would give some special consideration to these individuals facing so many difficulties.
An hon. member of the New Democratic Party on Friday- and I cannot recall the specific individual's constituency- brought forward a motion pertaining to this very important problem. Hon. members came forward with a number of suggestions as to how we might help these individuals, not only in the area of taxation, but in the area of other legislation which pertains to them.
It is obvious when we note the actions of the minister responsible for the status of women, that callous attitude with which he treated the status of women group, he does not have any specific or sincere concern for them.
I hope the government will adopt a number of the recommendations these very valuable groups have come forward with, not only in respect of taxation measures, but in respect of other measures which affect single-parent families.
Coming from western Canada I should like to put on record some of the grievances individuals have in that area. While some of the topics I will touch upon do not directly deal with the legislation before us, I hope to connect those remarks to the clauses that pertain to this legislation.
The prairie region has fought long and bitterly against the colonial conditions imposed upon it by the populous and politically powerful region of central Canada. If forced to fight again it will. Today it is absolutely convinced that the tax policies of our Minister of Finance and the energy plans of our minister responsible for energy imply a reversion to the west's old colonial status. The west will not resume the role of a colony without resistance.
We not only have the budgetary measures as they pertain to energy, we also have the constitutional proposals which in essence make us in the western provinces, in fact all those provinces outside Quebec and Ontario, second-class citizens.
Let me just go back into a bit of the history. Historically the political and commercial powers of the centre have always merged their interests; the management of the resources of western Canada for the benefit of the central commercial empire of Canada was and is their principal joint venture. The mutual benefit from the merger was control of the resources of the prairies for the commercial benefit of the industries of the centre and the concurrence electoral support for industry's political allies in the east where it really counted. Both stood to win. The fact that the west stood to lose was a regrettable side effect that resulted from the nature of the nation.
Inescapably the purposes of the dominion and the national interest were and are still defined by the economic and political power blocs of central Canada. In 1867 one of the terms of the confederation of Ontario, Quebec, New Brunswick and Nova Scotia was that each province would own and control the natural resources within its borders. In 1870 the region which is now the three prairie provinces was transformed from a trapping and trading preserve of the Hudson's Bay Company and became a colony of the newly-confederated provinces. That same year Manitoba was converted from a colony to a province, but it was not a province like the others. The provinces of Canada owned and controlled their natural resources but Manitoba did neither. Manitoba was really a colony.
In 1905 Alberta and Saskatchewan were carved out of the colonial territories and called provinces but, like Manitoba, they were not permitted to assume ownership and control of their own natural resources. Their resources were retained by Ottawa for the purposes of Canada.
In 1930 anger, agitation, alienation, hostility and periodic talk of separation earned their reward. The ownership and control of natural resources were finally transferred to the prairie provinces. Only in the past 50 years have these provinces been equal partners to the founding partners.
The term "colony" is used carefully. The reality is that the resources of the three provinces were unblushingly used by central Canada for political power and commercial imperialism. For Manitoba's 60 years as a colony it had no adequate real or potential source of provincial revenue. Saskatchewan and Alberta were in a similar state. The three prairie provinces
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went into the depression and drought of the 1930s in terrible financial situation as a result of the public debt they built up, while Ottawa was looting their land and resources.
Surely viewing history any public policymaker would move with great care. Resource control in the prairie region, as a consequence of past experience, would clearly be viewed as a sensitive and potentially divisive issue. The west has always had to fight the central Canada instinct that western resources belonged to the east. For the long-term interests of Canada that may have been a good policy. Perhaps a strong industrial and commercial heartland was crucial to nation building, but what must be recognized is that, rightly or wrongly, the western provinces see ownership, control and management of resources as their only hope for equity, if they are to sit in on a game which has been Fixed against them. The ability to control these resource is absolutely fundamental to the ability of the three provinces to manage their own economies. In the case of oil and gas, they cannot control price, and this quite evidently weakens their ability to manage their own affairs. If, in addition, a court should find they cannot determine the rate of production'of oil, or any other resource, the prairie provinces joined by British Columbia will revert once again to being colonies of central Canada.
It may be that Ottawa can get a favourable ruling from a court or, through its declaratory powers, can dictate the rate of production of the oil fields of Alberta, but Ottawa would be remarkably foolish if it considered it. What Ottawa needs is not a legal justification but an understanding of the legitimacy of western Canadian concerns.
It would be useful if reason, justice and real understanding of prairie experience could be introduced into the discussions between Alberta and Ottawa. They would be a pleasing substitute for the cleverness of the Ottawa policy planners and for the skilful and cynical massaging of words by the public relations specialists in the Department of Energy, Mines and Resources.
It would be helpful if Ontario came to understand how dangerous western alienation is to Ontario's long-term economic interests. But the real onus is on Ottawa. The real onus is on our friends across the way because Ottawa must learn that sharing, fairness and equity-words so freely used in the National Energy Program-are something more than verbal daggers to wound a debating foe.


Mr. Gamble:: Mr. Chairman, when I last spoke about Bill C-54, I had an opportunity to deal with two of the chief deficiencies in this bill and, indeed, two of the chief deficiencies in the act this bill seeks to amend. Those dealt with the general absence of fair play and equity which apply to both taxpayer and Minister of National Revenue alike. 1 also drew attention to the fact that in its present form this bill does nothing to alleviate the absolute inability the average taxpayer of this country, as defined by the act, has in understanding the terms of the act. I suggested at that time that it was the
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obligation of this House to draft laws which, if they are to be obeyed, are at least to be understood.
The Income Tax Act sought to be amended by Bill C-54 has its legal foundation and justification in Section 91(3) of the British North America Act, which permits the federal gover-ment to impose any tax by any mode or system of taxation, and it refers to the opening paragraph of Section 91 of that act, which grants to the federal government the right to make laws for the peace, order and good government of Canada.
The Income Tax Act has been used since its predecessor was enacted in September of 1917, originally as a temporary measure, for the purpose of achieving something other than the actual raising of revenues. It has been used for social purposes, and it has been used for the purpose of directing industrial or commercial activities on the part of Canadians. We know that the act has been used in that sense for the purpose of establishing the right of deductions for charitable donations, dependent deductions, and manufacturing and processing incentives. It at one time contained a provision to induce the Canadian public to engage in the very risky business of searching for mines and minerals by providing a tax exempt receipt system which applied to prospectors and those who grubstaked them. Those provisions no longer exist, presumably on the theory that it is no longer necessary to induce people to search actively and take the risks involved in searching for mines and minerals. There was a three-year holiday for mining companies between the time that a mine began to produce minerals in commerical quantities and the time when they became taxable. Similarly, that provision has been eliminated.
I use those illustrations to show that the purpose of the act has not been exclusively to raise revenues but, rather, to direct policies which are in the best interests of the people of Canada.
Accordingly, I come to the major objection to which I should like to draw the attention of the House this evening. My objection is that this bill fails by omission to deal with one of the most essential issues that should confront the government and this House. The bill makes no reference to sections 117 and 123 of the act, which provide the rates of taxation which are to apply to individuals and corporations. Our nation today is beset by high inflationary pressures and by interest rates which are, by their very nature, almost confiscatory in terms of their effect upon the business community in Canada. Because of inflation rates that run in excess of 11 per cent, individuals as employees who have gainful employment will stampede to extract from their employers additional revenues so that they may at least keep pace with the growth of inflation in Canada which the government appears unable to control. An uneasy circumstance will exist which will give rise to industrial disputes and work stoppages, which will have a detrimental effect on our ability as a nation to produce and sell our goods abroad and rectify the imbalance in our international payments.
These circumstances ought to direct the attention of the government to a very simple process, and that process must be the reduction of taxes. Even without current pressures which will be brought upon the Canadian economy it is just and
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reasonable, having regard to internal problems faced by Canadians, that adjustments of a substantial downward nature be made in the rates of tax imposed against Canadian enterprise and Canadian individuals.
The vast amount of tax raised through the Income Tax Act is raised from individuals and not from large corporations or small business corporations in Canada. Of the large amount of taxes raised from individuals, over 70 per cent, according to Revenue Canada's latest statistics, come from employees. If rewarded for their effort by a reduction in the federal government grab, these employees would be in a better position to increase the money supply at their disposal so that they might generate jobs for their fellow Canadians and put a much needed stimulus into the Canadian economy.
The Income Tax Act contains a provision which obliges employers to deduct and remit to Revenue Canada on a regular pay basis that portion of the income tax and Canada Pension Plan contributions which must be made by individual taxpayers who are employees. Without that provision it is doubtful that this country could last one year without a tax revolt. Taxpayers do not realize the immense amount of money they pour into the Treasury or the Consolidated Revenue Fund administered by the Government of Canada. It may be painless to them individually on a weekly, bi-weekly or monthly basis, but the hundreds of millions of dollars which are extracted in this fashion, the billions of dollars which go into the Consolidated Revenue Fund, could best be spent by the people who earn the money, rather than by the government which has shown in the past every inclination to waste it. We could recite illustrations of that for the rest of the evening.
One of the great undertakings of the Prime Minister and of the current government is the creation of an international redistribution of wealth to be carried out under the guise of meeting commitments under the North-South dialogue. This country, through the generosity of its taxpayers who were certainly not consulted about the process, is pumping $1.2 billion annually into foreign aid. We have seen a recent illustration of that in an announcement today that Zimbabwe is to receive $50 million over a period of ten years. That, of course, is but a small illustration of the constant flow of funds from Canada to foreign nations, many of which are under the control of dictatorial regimes which have no respect for the ordinary, generally accepted principles of human dignity. Many of these nations, which operate under a one-party system and therefore might correctly be called dictatorships, have no reference to the democratic system, yet our government persists in the view that it is absolutely essential for us to make these commitments. To what end are we making these commitments?
In 1977 we saw an illustration of the way in which some of these funds were distributed, not directly by CIDA but by another government agency, namely, the Export Development Corporation, measurably assisted by Canadians. It was a loan of some $67 million, as I recall, to Inco which developed a
mine in Guatemala as a result of which the work of miners in the Sudbury area was no longer essential because that company could acquire its raw materials at a cheaper price from Guatemala. What we see here is the citizens of this country paying with their tax dollars to put their fellow citizens out of work. That is exactly how the North-South dialogue will work and how the new international order will work. I think the public should be made well aware of it. Having put their fellow citizens out of work, the public was requested to contribute to the Consolidated Revenue Fund so that unemployment insurance payments may be made to those very people whom they caused to be unemployed.
It is the height of folly; it is something which, as individual donors, very few taxpayers in Canada-certainly no one who used his head-would pursue on an individual basis. I suggest to the government that the people best able to attend to the administration of their funds are the taxpayers of Canada. 1 suggest to the government, if it really believes there is a crying, urgent need expressed by the people of this country to assist others, it let them assist themselves by setting up a machinery whereby donations can flow in from the pocketbooks of those from whom the funds are now extracted by law. They should be asked to make the donations which their government now makes on their behalf.
I made reference to this after commenting upon the provisions of the British North America Act. 1 question the legality of the Government of Canada imposing taxes by any mode or system if it is not for the peace, order and good government of Canada. I recognize that Section 92 in dealing with the right of the provinces to extract direct taxation is confined to the use of those tax funds for purely provincial purposes. The same does not appear in Section 91, but the implication is there.
If we were at the point where we were last year, the issue would not be as significant as it is today. I asked the Minister of Finance in the House on November 17, 1980, the following question:
In light of the change in government which we anticipate in the United States as the result of the recent election there and some of the specific promises by the president-elect to reduce taxation, despite the fact that the minister's budget was recently passed by this House, is it his intention to reduce taxes in Canada in order to correspond with intended tax reductions in the United States, so as to offset the magnet-like effect of attracting business in North America to those jurisdictions with the lowest tax rates?
The minister responded by saying that I was fully aware of the fact that the budget contained a provision for indexing. He might have gone on to say, although he did not, that he promised in his budget the great deductions would be indexed for 1981, but there was no promise for any future year.
Business is attracted to a climate which welcomes it, and the greatest welcome comes from an area in which that business may be conducted allowing it as much of a profit at the end as possible. Such a country is the United States. They will in fact reduce taxes across the board for individuals and for corporations, while our government stands still and does nothing. We need the enterprise and the investment of Canadians. Business must develop in Canada so as to offer jobs, not only to those who do not have them now, but to those who are coming into
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the work force and who desperately look to this government to lead the way. Instead of creating that climate, the government has turned its back on what is reasonable. It insists upon maintaining a high tax level in Canada so that business expansion will not develop here but will go elsewhere to a place where it is welcome, to a place where jobs will be offered to Americans and not to Canadians. Once the process is begun, it is extremely difficult to retard or reverse it. This government has given no indication that it is even interested in what is going to happen, and yet the handwriting is on the wall.
When Premier Davis journeyed to Japan two years ago, he was met by an observation from the Japanese to the effect that it was pointless to suggest that they invest in Canada because here the rates of taxation were too high for them. We are begging the Japanese to invest in our country; I think that is shameful in itself. We should be investing in our country ourselves, but after the great grab by the federal government, there is little left for anyone to invest. But they told us exactly what their position was. If one examined the foreign aid donations of Japan, one would find they are not as great in terms of their gross national product as are ours.
If one examines the percentage of donations to foreign aid by the United States, one will find that it is markedly less than ours. It is less than half. What has happened is that we are giving our money away so we can go to foreign nations and beg them to invest in our country. The whole situation is crazy. We should be encouraging Canadians to develop their own nation. Why would we ask Japan to come and develop our nation? They have been shrewd enough to look after their own finances well. Is it so that we can then let the dividends and profits from the generation of the business which they might hopefully establish here flow to the United States or Japan?
I earnestly beg the government to look at this issue and to give it the attention it deserves.


Mr. Hamilton (Qu'Appelle-Moose Mountain):: Mr. Chairman, I think my remarks tonight will follow very closely the closing peregrinations of the hon. member for York North. Before I get to those remarks, I want to congratulate the hon. member for Mississauga South who very quietly this afternoon, with tremendous knowledge of the detail with which the program works, asked again for the third or fourth time that the government give serious consideration in this bill to the extension of the time allowed for the Small Business Development Bonds. It is only one of the items with which the Crosbie budget tried to reduce taxes on things people needed so that more money would be spent, more jobs would occur and more money would flow back to the taxpayer. It is a very simple request which the member for Mississauga South makes. Even if the government were to extend the expiry date a year he would be grateful. I personally wish they would extend it for at least five years and give small business, whether it be on the farm or in the city, a chance to use development money at about one-half the present interest rate. Within a year or so the government would find that the income flowing back from
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this program would be much greater than any loss they might suffer.
This is the third time I have spoken with respect to this legislation. I had a list of 13 subjects, but I think this will be the last. I wish to follow the theme expressed by the hon. member who just took his seat. If the task of the Minister of Finance and his official at this time in the economic history of Canada is to balance the budget, to get the country growing and expanding, the way it should be done is to take advantage of the evidence which is before the government, that is, tax rates in Canada today are not competitive with our main competitors. We can assume that is right without giving examples.
I have seen this growing over a number of years. The hon. member took advantage of that fact by mentioning the mineral industry. We developed a great mining industry in Canada by establishing a three-year tax exemption. This was to allow the mining industry time to pay off its debt and reduce its interest rate charges to a point where it could show some profit on its whole investment. Since that three-year exemption was removed, I have seen Canadian mining investment money move to other countries where they receive a higher return on their investment. The mining industry is one which is largely Canadian-owned.
I would like to give an example where this has taken place. Two of our largest industrialized types of companies, Algoma Steel and Steel Company of Canada in Hamilton, were engaged in a joint operation of developing what would have been the biggest iron mine in the world, north of Ignace, Ontario. In 1973 the provincial government got greedy and tripled the tax rate on large mines from 15 per cent to 45 per cent. Other provinces right through to the west coast did the same thing. In 1974 the federal government stepped in and in its two budgets of 1974 declared that provincial taxes and royalties were non-deductible. There was a 45 per cent tax by the province on a mining operation in a remote area north of Ignace, which is 200 miles from Thunder Bay, the federal government jumped in with a 42 per cent to 50 per cent tax rate, which was also non-deductible, then the effective tax load on that mining operation was over 90 per cent-45 per cent to the province and 42 to 50 per cent to the federal government, depending on the mine's income level. So those two large Canadian companies moved quietly across the border into Minnesota. They invested a billion dollars into developments of low-grade taconite, and today Canada imports raw iron from the United States. This puts Canadians out of work because of our tax laws.
Surely that is enough evidence in that one case alone, which affected the province of Ontario, where both the provincial government and the federal government in their quarrel and fight for revenues destroyed a very promising industry. This has all been admitted in the House. When the Hon. Don Macdonald was minister of finance he agreed this was so. He said we would have to obtain peace between the provinces and the federal government over this heavy taxation on resource industries.

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At that particular time, when Mr. Tommy Douglas was in the House, the NDP were with the Conservatives asking for lower tax rates on resource industries. Now the NDP has allied themselves with this government. We have the two of them systematically driving industries out of this country. They then have the gall to turn around and complain that these companies in Ontario are importing iron from Minnesota, putting Canadians out of work. Who drove them out? This philosophy of driving taxes higher and higher to meet the demands of government drove two Canadian-owned, Canadian-controlled companies into development in high-priced ore in Minnesota. At least there they could make a profit out of their operations. But if they developed that iron ore in Canada they would lose money. I am simply saying the principle of reducing taxes to get more money is not only proven by quantitative analysis in almost every country in the western world, but it is clearly proven here in Canada where our tax rates are no longer competitive with the main competitors.
I want to conclude this series of hopefully constructive speeches on my part with how we can encourage Canadians to invest in their own country, to own their own companies in Canada as individuals and to make more money for the tax collector by investing in common shares. With present high interest rates all our large companies, in their fight for survival against these high interest rates, must shift from borrowing money at fixed rates to equity. Massey-Ferguson is putting out 30 million or 40 million new shares. Hopefully they can get rid of them. Stelco is moving into equity, as is Dofasco. In order to save themselves all our big companies must move into equity or they will be down the tube, just like the car companies. It is not only a question of bad management in borrowing money at these interest rates, but it is also a question of who it was who forced those interest rates up. It was a series of governments which did not measure on the basis of quantitative analysis of what was best, but on what the textbooks said one should do. Thus, we have this mad rush toward higher interest rates. The American nitwits, believing in the same rules and textbooks, are doing the same thing. This has been made clear by nearly everyone across this country, yet we have this determination to commit hara-kiri, suicide, or whatever one wants to call it, in the economic field. The very unique 1979 budget came out and gave a whole series of small examples on reducing taxation. One of them was on this question of encouraging Canadians to go into common stocks.
Of course, there will not be as much money in the beginning, but then there will not be a load on the company as it is developing. When the profits finally come the return from equity will be much bigger than the return from bonds. I would like to take the liberty of quoting for the record the proposal outlined in the 1979 budget which was defeated. I am quoting from page 11 of the budget papers, which reads as follows:
That for the 1980 and subsequent taxation years, a Canadian common stock investment plan for individual investors resident in Canada be introduced in respect of which the following rules will apply:
(a)	an investor may have only one plan at any time,
(b)	up to $20,000 may be contributed to the plan in 1980, thereafter annual contributions may not exceed $10,000 and total net contributions may not exceed $100,000,
(c)	the investments of the plan will be restricted to certain short-term debt obligations and to securities of taxable Canadian corporations that are common shares, warrants or rights in respect of such shares or shares that are convertible into common shares provided that such securities are listed on a prescribed stock exchange in Canada.
It goes on to say that dividends, interest and so on will be taxable. Every member of this House wishes to see-and the government has announced it as a priority-that Canada's resources are owned by Canadians. We know that these resources cannot be owned successfully by Crown corporations. We have the experience of the whole world and, indeed, of Canada to demonstrate that fact. The answer is to let millions of common Canadians invest in common stock, if 1 may use the word twice, so that they may own as individuals. As individuals who own investments in these companies, they will watch carefully and maintain the pressure to ensure that there is efficiency and growth within the company.
The omission from the present budget of that program, parts of which I just quoted, means the loss of a glorious opportunity for Canadians to own more of their country through buying individual shares. Of course, they would expect to receive a larger return later on than if they were to buy bonds. We have all learned over these past ten years that any person who buys a bond is cutting his financial throat and will lose his money because of inflation. But here is a way of fighting inflation, of putting more people to work, producing more goods and, thereby, more revenue for the government to help reduce our deficit. The government could then look for other ways to reduce taxes.
The question of common shares has been in my mind ever since I came to this House. If one looks at the regulations put forward in 1957 with regard to oil, gas and minerals in the north one will be proud, as I was. I waited for so long for Canadians to have the opportunity to own their own country as individuals, instead of our industry being owned primarily by people outside the country. For example, in the case of our oil the provincial government regulations turned our oil industry over to foreign companies. But on the Canada lands which were controlled by the federal government, Canadians would have the first chance to own and control the resources as well as receiving the bulk of the revenues. Those oil and gas regulations were brought up to date and improved in 1976 and supported by my party.
To see those regulations destroyed through the legislation which came before Parliament this year was simply cruel. All the advances toward the objective of Canadian ownership, which is the purpose of the government, were destroyed by that legislation. This debate has been going on for several days, and the government has been very good in allowing hon. members to speak their minds. Most of the members who have spoken have tried their level best to put forward positive suggestions.
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There has been the suggestion that the government try to save the Small Business Development Bond. I know that it is too late to go back and put in a section with regard to common shares. The time factor is too great. I hope the Minister of Finance and the government supporters behind him will remind each other over the next few months, before the next budget in the spring, to put that proposal back into the budget. Then all those other devices of reducing taxes and producing more to obtain more money for the tax collector will help to fight inflation, balance the budget and get this country back in shape.
This is not my view alone. An election was fought in the United States last fall on this very issue, and everybody laughed. They said, "Imagine reducing taxes to make more money, how ridiculous". However, there is the precedent in the United States in 1963-1964, and there are many more as well.
The first minister of finance to ever introduce such a proposal was the hon. member for St. John's West. I was not here for the budget speech, as everyone knows. However, after reading the budget paper, I realized that this was a very unique budget. Even though the government was defeated on that budget, I went out and spoke at meetings throughout my constituency and, although I found great excitement over the fact that the government had been defeated, there was an awful lot of sadness because the things for which I had fought and which had appeared in small measure in the budget had been voted down.
People had no trouble in saying that his was a good budget, or, at least, not too bad. It distressed me to see the election fought on issues which had no relationship to the fact that here was the first budget in Canadian history which was attempting to balance the budget by reducing taxes. As I have mentioned in the House before, the intellectuals of the English-speaking world will soon be teaching their classses about this unique budget. Before long, that viewpoint will go throughout the entire populous and will ultimately come back to Canada. Everybody knows what I meant when 1 told the Minister of Finance some weeks ago that I felt sorry for him because he had an economic policy which was suposed to be as disciplined as the 1979 budget, that he zigged when he should have zagged.
I ask the government to consider the proposals put forward by several hon. members with regard to the Small Business Development Bond and to do some real thinking with regard to the matters of capital gains, energy tax credits, reducing taxes in resource industries to increase production, reducing the taxes on the movement of energy and reducing the taxes on the more value-added industries because of cheaper energy in Canada. There is lots of energy in this country, we are a strong country. Let us get it on the go. Let us not muck up this country with the stupid idea that we must keep raising taxes and making tax laws more complicated in the hope of receiving more money, because there will not be any more money if the taxes are too high. I suggest in all seriousness, because we will be in this House together for four years, that we begin with
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this job right away or the opportunities which are before us now in this world of nations will be gone forever.


Mr. Thomson:: Mr. Chairman, I would like to endorse what the hon. member for Qu'appelle-Moose Mountain had to say about Canadian ownership of Canadian equity. Before becoming a Member of Parliament, 1 was involved for 20 years in the business community. 1 was president of a company which offered its common stock to the employees and encouraged them to buy it. No single action that company took in a period of 15 years was more positive and constructive to both the employees and the company than placing part of the ownership in the employees' hands. 1 might also say that there could be no more constructive force in the Canadian economy than placing equity in the hands of the Canadian people.
Just recently I returned from a visit to Sweden as a member of a task force which was investigating how Canada might improve trade with that country through a national trading corporation. Only a few years ago Sweden was held up as a model economy in the free world. I would urge all hon. members to go to Sweden today and see that model, that socialist experiment. It would be particularly interesting to my friends on my left.
In 1980 Sweden had a fiscal deficit of $18 billion. That is equivalent to a $50 billion fiscal deficit in Canada, yet Sweden has a population of only eight million people.


Terence James (Terry) Sargeant: Do you know what you are talking about?


John William Thomson: In Sweden, if you earn $25,000 per year, you pay $13,000 in taxes. That means your marginal rate of tax is 75 per cent. If you earn $32,000, the marginal rate of tax is 85 per cent. That is the social experiment, Mr. Chairman. While I was in Sweden there was a rather large snowfall so I had to buy a pair of galoshes. They cost me 159 kroner or $50 Canadian. I could have bought them here for under $10.


Miss Jewett:: What Calgary interest are you representing?


John William Thomson: The Swedes have nationalized the iron ore industry. They have nationalized the steel industry. They have nationalized their-


An hon. Member:: We have done that.


John William Thomson: Does the hon. member want to listen or does he want to talk?


An hon. Member:: I would like to listen to some sense.


John William Thomson: I thought it was my turn. Sweden has nationalized the steel industry, the coal industry and the shipbuilding industry. In 1970 their standard of living was the second highest in the free world; today it is twentieth. That is what the socialist experiment has done for Sweden.


Pauline Jewett: They have had a Tory government for three years.

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John William Thomson: They have the highest suicide rate in the world and one of the highest rates of alcoholism. What has the socialist experiment done for Sweden?


An hon. Member:: Ruined it.


John William Thomson: This brings me to the question: Is Canada going down the same road?


An hon. Member:: Oh, no!


An hon. Member:: Oh, yes!


John William Thomson: No, Canada is not going down the same road! We are not living beyond our means! The Canadian government is not living beyond our means! We had no real growth in our country in 1980 and yet the level of government expenditures increased from $54 billion to $63.5 billion. In 1981-82 there will be a no-growth situation again, yet government expenditures will rise to $73.5 billion.
In 1980 the federal government took 25 per cent of the gross national product; in 1981-82 it intends to take 30 per cent of the gross national product.
What was it that caused Sweden to go downhill, Mr. Chairman? It happened because nobody cared enough to make the capital investment needed to create jobs. The government has taken so much money out of the economy that nothing was left with which to create capital investment. The same thing is happening in Canada. The Liberal government has made no effort whatsoever to restrain its expenditures.
Instead of focusing on growth and increasing the size of the economic pie, the Liberal government has focused on ways to take more and more revenue from the same size of pie and from a stagnating economy.
The Liberal government claims that it must have more revenue and that the revenue must come from the oil industry; that the oil industry is going to have to pay!


Mr. Chenier:: That is what you wanted to do last year. The Canadian people would have paid.


John William Thomson: The sad part of this is that any knowledgeable authority-and I would not expect to find any on the other side of the House-would say that we must spend between $400 and $600 billion in the next ten years if we are to have the energy which will be required to fuel our economy. Yet the Liberal government tells us that it is not going to give industry the money to do that; that it is going to take it away from industry. That means there is no hope of energy security for the Canadian people. That is the policy of this government.
The October, 1980, budget of the Minister of Finance was not concerned with fiscal policy; it was simply a statement of the National Energy Program. Surely the cornerstone of any energy policy should be the assurance of supply for Canadians. That surely should be the most important consideration for the next ten to 20 years. Instead, the National Energy Program is a plan to penalize industry and discourage investment when it should be seeking ways to improve production and to eliminate
the crude oil imports which in 1980 amounted to the staggering sum of $7.5 billion. It takes but a fraction of a second to say $7.5 billion, Mr. Chairman. But it is over 10 per cent of the gross spending of the federal government. It is 3 per cent of the gross national product. It is a staggering amount of money that does not need to be spent and that is the tragedy. Canada does not need to fork out $7.5 billion for imports when it could spend that money at home where it would create jobs and mean energy security for Canadians.
The worst part of this is the immorality of the government saying it is going to borrow $3 billion to subsidize the consumption of gasoline in this country, and that the Canadian people will assume that burden. That decision is immoral and there is no economic justification for it.
Assessments of the National Energy Program so far have indicated that the goal of self-sufficiency will not be reached by the end of this decade. Indeed, the National Energy Program itself will be a major hindrance to achieving this goal. How many people across Canada have said that time and time again? Is everybody in Canada out of step with the Liberal government and with the Minister of Energy, Mines and Resources? Is everybody in Canada out of step with them?


Mr. Dingwall:: No, only the oil industry.


John William Thomson: Who else? What about the Canadian Construction Association? What about the Canadian Manufacturers' Association?


Mr. Blais:: How about Bill Davis?


John William Thomson: What about the bankers? Are they out of step?


An hon. Member:: Tell us.


William Hunter (Bill) McKnight: There is not much point, you do not listen.


John William Thomson: The program is deficient on at least four major counts. First, the price of oil has not been increased sufficiently to promote conservation and to provide a return to the producer sufficient to promote exploration and development. Exploration capital is already leaving to seek higher returns elsewhere. Those are irrefutable facts.


Miss Begin:: The first one is easy to refute. Do you think people are dumb?


John William Thomson: There are none so blind that will not see.


Mr. Deans:: You should coin that phrase.


John William Thomson: Second, the program is unrealistic in its treatment of western Canada. It fails to look upon the development of the west as a great opportunity for all Canadians.


An hon. Member:: Nonsense.
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John William Thomson: Nonsense? Go to Calgary, go to Edmonton, go to Estevan and see the rigs crossing the border. Watch the companies shutting down. For heaven's sake, open up your eyes.


An hon. Member:: He is afraid to.


David Michael Collenette: There are more there this year than there were last year.


John William Thomson: You do not know what you are talking about.


Monique Bégin: Go easy. Listen to people.


Gordon Edward Taylor: Go out and take a look.


John William Thomson: Third, the arbitrary and punitive thrust of the program makes it a focal point for forces that are attempting to divide the country.
Fourth, the program is a move to increase government involvement in the industry. This is a backward step. The oil and gas industry, as most industries, cannot be operated by government; governments cannot operate industry. Things are created and a country is built with entrepreneurial spirit whether or not hon. members want to believe it.


An hon. Member:: Adam Smith lives again.


John William Thomson: The oil industry needs profit-orienting goals to produce continuing successful exploration and development.
Knowledgeable authorities throughout Canada have stated that the National Energy Program will leave Canada with substantially higher shortfalls in production in the 1980s, which will mean increased dependence on imported oil by 1985. Instead of seizing the opportunity for the oil and gas industry to make a substantial contribution to the economic growth of Canada, Canada's growth prospects under the National Energy Program are dismal, if not negative.
Some competent authorities have gone so far as to say the National Energy Program could be instrumental in producing a national economic disaster. At the core of the criticism of the National Energy Program is the issue of oil pricing and the attempt to isolate Canada from international energy markets.
The day after the Minister of Finance introduced his budget, 1 remember the headlines of the Economist in Britain. It read: "Canada resigns from the world." That is what we have done. Do you know of any other country in the industrialized free world which is pursuing the madness of energy prices at less than 50 per cent of world price, Mr. Chairman? Do you know of any other government in the world that is doing that? It is madness.


Monique Bégin: Is there any other country better than Canada?


An hon. Member:: Yes.


John William Thomson: Canada must surely realize that this country is part of the world energy system. Do we not have to recognize that we are part of the world? Prices for petroleum will remain high. They will likely go higher. Given the relative-
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ly short life of our remaining oil reserves, Canada cannot afford to subsidize the consumption of such a valuable resource. I ask the hon. Minister of National Health and Welfare to tell me which country is subsidizing the consumption of a scarce resource? Is any other country in the industrialized world subsidizing the consumption of a scarce commodity?


Monique Bégin: Name a better country than Canada.


Gordon Edward Taylor: Alberta.


John William Thomson: I would not name it. I love this country. That has nothing to do with the economic policies put forward by the hon. member's government.


Some hon. Members:: Hear, hear!


John William Thomson: Only when Canadians establish the price of their petroleum resources near the levels at which most world petroleum is bought and sold will rational decisions regarding the production and consumption of petroleum be made in Canada. Prices must be higher if we are to conserve our scarce resources and continue to search in Canada for new discoveries rather than looking in the United States or elsewhere.


Mr. Andre:: Or Senegal.


John William Thomson: Surely it makes sense to invest money in Canada rather than providing an incentive for companies to look abroad. Hon. members can laugh, but they will be laughing at the people who will be out of work as a result of the government's National Energy Program.
Apart from raising prices to achieve conservation, additional revenues received by the industry would encourage exploration. I could show hon. members case after case where the National Energy Program has had the effect of reducing producer netbacks to negative figures. In Saskatchewan and British Columbia it no longer pays to produce gas or oil from many fields. How can we possibly improve supply by making it uneconomic to produce and explore?
Higher oil prices now may ultimately be less expensive to Canada by speeding up energy resource development and reinforcing incentives toward conservation. The end result would be a reduced need for imports. Under the energy program the total burden of oil imports will eventually be borne through an additional tax on consumers of petroleum products, but in the interim taxpayers will continue to bear the burden of the rising costs of subsidies for oil imports. Reduced imports, therefore, would decrease government expenditures on subsidies. This would restore to the federal government some freedom of action in fiscal policy that a succession of federal deficits has taken away. A lower deficit with its reduced borrowing requirements would tend to reduce pressure on interest rates. I say to my friends on the left, "if you want lower interest rates, let us take a step in the right direction by reducing the federal deficit".
Borrowing requirements would tend to reduce the pressure on industry. The government would also have the option of

February 2, 1981
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cutting some income taxes. Heaven forbid we should ever cut income taxes. Such reductions could be made in individual income taxes or in manufacturers' sales tax. It is likely that an increase in petroleum prices substantially offset by tax reductions would not exacerbate inflation. We are all concerned with inflation. In addition to these considerations, it must be remembered that the cost of not raising prices might be actual shortages of petroleum products in the future.
Every region of Canada can benefit from the development of oil and gas resources in the western provinces, off the east coast and in the Arctic. The further development of other energy sources throughout this nation, whether from hydroelectric power, nuclear power or renewable sources, will also stimulate national economic growth. In past years, major development projects such as the TransCanada PipeLine, the resources boom of the 1950s and others have given Canada strong impetus to economic growth and have strengthened our nation tremendously. Let us pursue energy developments of the eighties in the same way, as a source of economic strength, as a key to rapid economic growth and increased productivity and as a spur to greater political and economic unity.


Ian Deans: Mr. Chairman, I do not intend to be nearly as long, and I do not intend to discuss Sweden. However, I do not mind pointing out there is no doubt that with the introduction of the policies of the Conservative government in Sweden after the defeat of the social democratic party three years ago, Sweden did go downhill rapidly.


An hon. Member:: He didn't know they had been defeated.


Ian Deans: This not being the place to discuss that, I want to talk about conditions in Canada for a moment or two. I will deal with the matter I started to speak about on Friday last. Before I get to it, I want to raise with the minister, since we are talking about income tax, the tax rates paid by lower income earners in this country.
I was in Hamilton today to see constituents and to attend the funeral of a long time friend who served in the Ontario legislature for over 20 years. While there, a woman visited me in my constituency office in order to talk about problems that confront her. This woman, who works as a beauty parlour operator, earns approximately $6,000 a year. As she outlined her difficulties to me, it became very clear that on $6,000 one cannot afford to pay income tax.
This is a woman in her middle years, obviously independent and desirous of making her own way, not eager to become part of the statistics of government expense. She pointed out the rent she has to pay, her cost of food, which rises every day, her normal costs attached to living and her costs of going to work, providing uniforms and getting them cleaned. After adding up all those costs, what this woman really needed was the money she paid on income tax just to make ends meet.
The federal government should ask Alberta to give us a little of its oil money so that this poor woman will not have to pay
income tax out of such a meagre wage. I listened to the hon. member for Calgary South speak about how the system works and the fact that the oil companies are not getting enough money, how they need more and more, and how they are going to raise their prices in order to get even more, which is considerably in excess of what they can use. It makes me think of this woman in my office pointing out to me her fixed costs over which she has absolutely no control. I wonder just where our priority ought to lie.
If the minister has an opportunity to respond, I ask him to share with us his thoughts on undertaking a review of the income tax structure at the lowest levels, for a start. Possibly it could be substantiated that our cut-off point is too low. In keeping with the obvious need, we should consider whether there are ways to introduce a higher level of personal deduction or some form of rebate or credit which would afford these people an opportunity to meet their commitments on a day-today basis. They just cannot make it.
Knowing the minister's interest in the matter, it is not necessary to go into detail. However, it galls me when a member of this place talks about the billions of dollars going into the coffers of the multinational oil companies to be taken out of this country and invested elsewhere. I think of this woman who was born in Canada, lived here all her life, has worked every day since her mid-teens and cannot make ends meet. The hon. member is prepared to raise her costs. This woman's heating costs will go up so that the multinational oil companies can take her money to invest in some other part of the world. I find that a difficult argument to accept. It is time that members of this House who raise matters of this kind got out of this place and spoke to those who built this country and cannot afford to pay any more. We should take a serious look at the system which now exists.
I read a story over the weekend which brought this back to mind. It is in the justice column of the November 17 issue of Maclean's magazine. I commend it to the minister as there is a certain amount of value to be gleaned from it. The story, written by Ann Silversides is headed "The Catch-22 of single parents on welfare".
This article states almost exactly what I raised in the House on Friday last. It speaks of the entrapment of people within the system and how difficult it is for them to get out of it. With a family to raise, they must find a job. They discover that women in the work force earn just slightly more than 50 per cent of that earned by men. Therefore, they must raise their family on an income considerably less than is normally considered to be required in order to survive in this country. This article confirms what I said on Friday when speaking on another piece of legislation.
I do not want to repeat myself unnecessarily, but we are facing difficult times in this country. There are ever-larger numbers who have to raise their families alone. Within the income tax structure and grant structures which flow from the distribution of income, we must find a way to support these people during their difficult transitional period, at the same time encouraging them to upgrade or use their current skills in
February 2, 1981

order to fit into the work force. They should not have to choose between a job on one hand and welfare payments on the other. The vast majority would prefer to work. However, the income levels available to the majority of women are not enough to pay the bills. Unfortunately, because of the one-for-one ratio, if they accept a part-time job, they lose a dollar for every dollar they earn, placing them in a situation which deprives not only themselves, but their children. This interesting article refers to the problem of not being able to do for your kids what everybody else on the street is doing for theirs.
I just do not believe as I look at the billions and billions of dollars we spend and think of the tens of hundreds of billions of dollars we are projecting we will spend, and the fact that by and far the majority of that money, 99 per cent, will be raised in one way or another through the tax structure, that we cannot find a way here to undertake a meaningful review of the plight, first of the lady I spoke of whose income really does not afford her enough money to pay taxes, and of the people who, through no fault of their own in many cases, and in some cases perhaps even through a fault of their own, but who cares because it does not matter in the long run, are faced with poverty and with the problem of being trapped in a system which almost requires that they stay on social assistance. I know my good friend and colleague, the hon. member for Hamilton West who is sitting listening with rapture to what 1 am saying, is very sympathetic to this because 1 am sure he deals with people in this category frequently on the weekends. I am sure if he has the opportunity he will be saying to the minister, either privately in his ear or publicly in the House of Commons, that we have reached that point in time where we have to review the structure of the tax system with which we live.
I know the minister remembers the Carter commission and the work done by Mr. Carter-1 cannot remember his name, who said that the whole tax structure has to be reviewed, we have to consider a dollar as a dollar; a buck is a buck is a buck and we must tax it that way. We cannot have different systems for different people. We cannot have a system in which the wealthier you are the less you pay in proportion because the more you can write off.
I think what we are seeing is Canada being bogged down by an inadequate non-progressive system. I should like to ask the minister whether he can explain to us at this point in time not only the content of this bill, which really in itself does not address this particular problem, but what kind of review is currently under way and what we can expect to see in the next two or three years before this Parliament is dissolved. I do not think this can go on much longer. It is not possible for this country to hold together, if we have such poverty at some levels and such wealth at others. I do not think we can argue with any degree of conviction for ever greater sums of money for the multinational oil companies, while at the other end of the scale we are completely ignoring the plight of so many Canadians who have worked all their lives but who, through no fault of their own are unable to earn sufficient to make ends
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meet, expecting that somehow or another they will dig even deeper, tighten their belts, as the Prime Minister once said, do without something, change their priorities and continue to pay ever greater sums to people who in fact have more than they can use now. I would certainly appreciate it if the minister could take a moment now to perhaps explain this to us. Is he going to do it later; a lot later?


Pierre Bussières: At the end of the debate.


Ian Deans: You will not forget?


Pierre Bussières: Indeed I will not.


Ian Deans: This ir really important. It is probably more important than a discussion of Sweden's social structure. I have a sneaky suspicion we cannot do a lot about Sweden's social structure. 1 have a sneaky suspicion we cannot do anything about the financial problems of Sweden either, but I think we can do something about problems here. I say with the greatest generosity of spirit that I do not think all of the problems in Canada necessarily turn on whether we pay more for oil. I do not think that need be the crux of every argument we have here. I do not think it is necessary that we accede to greed and that we allow ourselves to be dictated to by OPEC nations' decisions on what oil is worth because they have the corner on the market. The oil in Canada belongs to us, to all of us, and the way we use it will determine the future of Canada.
We can only afford out of our gross national product to pay a certain amount of money for oil. We have obligations which go beyond paying just whatever it is that the oil companies would like. We have obligations to other people, and the only way we can meet that type of obligation of which I speak is if we have something left over after we pay the price of gasoline, the price of natural gas and the price of home heating oil.
I would ask the minister to address himself to these problems because I think in the long run they are going to be more important than whether we pay Alberta world prices.


Mr. McKenzie:: Mr. Chairman, I should just like to correct a few things that have been put or. the record tonight about the government's energy and tax bill.
The hon. member for Calgary North was talking about the disastrous conditions in Sweden today. It was pointed out by the hon. member for Hamilton Mountain that it now has a Conservative government. I should like to point out that the Conservative government has only been in power for one year, and there is no way to correct 44 years of socialism in one year. They have a real uphill battle ahead of them.
In addition, the hon. member for Hamilton Mountain mentioned something about cash flow. A speciality of members of the NDP is the giving of partial and false information to the Canadian public at every opportunity. Hon. members of that party like to talk about multinationals. I want to talk about Canadian oil companies. Hon. members of that party do not talk about these Canadian oil companies being driven out of this country. I am not here to defend multinationals, I am here to defend Canadian oil companies.
6808

February 2, 1981
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Let me point out that this cash flow is reinvested. If you do a little research you will find out that a lot of these companies borrow money to carry on their business. These are not a bunch of gouging Canadians stuffing profits into their pockets. Hon. members should get out on the campaign trail and tell the people the whole truth.
NDP members never mention such things as inflation accounting. I have heard very little about inflation accounting. If you do not make a lot of money today you will not survive. You must have high profit to continue in business because of double-digit inflation.
It is the Canadian oil companies which are being penalized by this national energy policy. I spent all last week and all weekend reading every paper and magazine available to me and I was unable to find anybody who supports the government energy package.
In addition a member from the NDP was talking about some poor lady who is suffering because of high energy prices. When we presented an energy package in the budget during the last Parliament, we had an energy tax credit to look after the low and middle-income earners. The NDP voted against that. They are not interested in some little old lady or a little old man or anybody else who is having a problem. They most certainly are not because they voted against assistance for the low and middle-income people, and the poor. You are utter frauds. You are against business, you are against profits, you are against entrepreneurs, and you are against anybody who is successful. Hon. members to my left would certainly penalize anyone who is successful.


Ian Deans: Don't be silly.


A. Daniel McKenzie: So far we do not have a threat nationally from the New Democratic Party, but it is still a threat provincially, and there is no love between the NDP and the business community. They hate each other because the NDP is against business. I just explained why, and if members of the NDP think business people or people with investments to make will stay in a province or country with a little group like the NDP running its affairs, they should think again. All they want to do is nationalize business, penalize anyone who is successful, and have alcoholics and others like they do in Sweden.
I think I learned something this past weekend with respect to what has brought this on. The Liberals have dug up a socialist to draft their national energy package. I have here an article printed in the Alberta Report. The Liberals have found "golden boy Clark", a gentleman by the name of W. Edmund Clark of the Department of Energy, Mines and Resources.
The article is entitled "A student of socialist technique". Of course, that is something the Liberal Party is looking for because the Liberal Party drafted its present leader from the NDP. He is a former member of the NDP and an NDP organizer. The Liberals are well on the way to taking us into a socialist doctrine, and their first step is to nationalize the
energy industry with its national energy package. This gentleman in the Department of Energy, Mines and Resources, Mr. Clark, has stated that people can be forced to conform. He wrote a thesis on Tanzania a number of years ago, and according to the article I have in my hand:
"Socialist Development and Public Investment in Tanzania ..is the title of W. Edmund Clark's doctoral thesis at the University of Toronto in 1975. The document is well known and ... it is seen as evidence that the principal author of the NEP is a confirmed socialist-
The first requirement of this government with respect to anything it wants drafted would be an avowed socialist. What do you think of that, Charlie?


Some hon. Members:: Oh, oh!


A. Daniel McKenzie: -and that the NEP itself may have as its purpose the nationalization of the oil industry rather than energy self-sufficiency.
According to statements made by various newspapers and magazines across the country, what we have is nationalization of the industry. The policy of hon. members opposite has nothing to do with self-sufficiency.
Another article is entitled "Continuing energy project delays darken outlook for steel industry". The hon. member for Hamilton Mountain can go back and explain that to the steel industry in Hamilton. Another article is entitled "Barrels of trouble: Marc Lalonde's energy program leaves our future oil supply dangerously vulnerable." But let us not worry about that; we will have gas rationing. The article goes on to say- and it is not just western hotheads who are saying so-and I quote: "Ottawa expects Canadians to cut down their massive oil thirst one quarter by 1985." This is what one oil man calls utter "magic".
We will also experience serious problems with respect to diesel fuel shortages. I have not heard any Liberals talking about that. The article says, and I quote:
Diesel fuel shortages may only be an early sign of graver trouble in store. To the economists, shortages are inevitable. "Milton Friedman calls it the iron law of controlled markets," says one. "If you have a price above the commodity market value, you get surpluses, like our natural gas at present. If you have a price below market, like our oil, you have shortages. It's obvious."
Obviously, it's not so obvious to Marc Lalonde.
I would like to read some more with respect to the socialist NEP package. Mr. Clark went on to say in his thesis on socialism, and I quote:
The study is seen as a part of a larger effort by scholars everywhere to turn their attention to the issue of how to build socialist societies. It is my belief that socialist scholars in particular should devote more of their energy to analysing the problems of socialist societies and the problems of transition in socialism, and somewhat less to criticizing capitalists.
Narrowly defining the role of institutions becomes particularly important in a political situation such as exists in Tanzania, where large numbers of the people are unsympathetic to socialism. One has to devise ways which force these people to act in the desired manner.
This is backfiring on hon. members opposite. They are not getting anyone "to act in the desired manner".
What is critical for a country just beginning the road to socialism-
February 2, 1981

We have not just begun. We started a few years ago, about 1968.
-is that it abandons the notion of examining every project on its merits, but rather devise crude measures which force decisions along certain lines.
The NEP package could certainly be described as a crude measure.
In fact, emerging socialist countries must be prepared to overcompensate in order to break the grip of integrated structure.
This is the type of individual the Liberal Party drafts to design its National Energy Program.
Interest rates were mentioned earlier this evening. I want to point out that the Liberal Party and the NDP are not in the least concerned about high interest rates. They like to kid people that they are, but 1 want to point out that the very first order of business in the last Parliament was a motion calling for an all-party committee to deal with the high-interest rate problem. The prime minister of the day, the present Leader of the Opposition, had absolutely no reservations about accepting that, and he accepted it immediately.
An all-party committee was formed. It met for a number of months and did excellent work studying how to deal with this problem and how we could assess home buyers, small businesses and all the rest. The committee was ready to submit an interim report by the end of December of 1979, but a motion saying nothing was being done about high interest rates was brought in. That was an absolute lie. That committee sat for about three months. It was working on the problem. Many more witnesses were still to be heard. Did we hear the hon. member for Winnipeg North Centre, the hon. member for Winnipeg North, or any other member of the New Democratic Party mention that that all-party committee was working on that problem? We heard not a word. A ridiculously silly petition was presented in this House a couple of weeks ago by the hon. member for Winnipeg North saying that something should be done about interest rates. Something was being done, and in this Parliament members of my party have brought in motions and asked questions about having that committee reappointed to deal with this problem. But all we hear is "no". That clearly indicates that hon. members opposite have absolutely no concern or interest. Interest rates could go to 30 per cent, and they could care less. That is the kind of nonsense which goes on in Ottawa now. The New Democratic Party should actually be described as "the public mischief party." What a little group of hypocrites! 1 have never witnessed anything like it in my life.
I was visited in my office last Thursday by members of the Winnipeg construction industry. They were very concerned about this energy policy. Last Friday I met with some officials from the aerospace industry in Winnipeg who were very concerned about the energy policy and how it affects their industry. The policy is having a ripple effect across the whole nation. It is affecting the steel industry and construction people. It does not matter who; people and industries will be affected by this ridiculous socialist policy. I want to quote from an article to show how the policy is affecting builders across Canada. The article states:
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Prompt resolution of the Ottawa-Alberta energy impasse is the key to pulling the country's construction industry out of its present doldrums, says the president of the Canadian Construction Association.
Industry uncertainty created by the ongoing energy war is delaying millions of dollars of investment in such projects as oil and gas transportation and the development of Canadian hydro and nuclear power-
The statements go on and on. Here is another quote:
Impact of the Canadian federal tax and energy policies unveiled October 28 is beginning to show up in the form of industry budget cuts, project postponements, and an exodus of drilling rigs to the U.S.
When I spoke on this bill last week, I pointed out that it is actually one of the finest things that has ever happened to the United States. I think that President Reagan down there is on the right road, and he is certainly getting a great boost from the Liberal government in Canada.
The article goes on to read:
After more than a month to study the federal programs, several firms are announcing plans to cut budgets as much as 45 per cent.
I hope the hon. member for Hamilton Mountain will go back and tell the steel industry in Hamilton, "we will socialize the oil industry. Won't it be wonderful? We will socialize the industry, but you will all be out of work." The article goes on to read:
And one firm has shelved a $400 million enhanced recovery project because of the federal policies.
Even if the government changes its mind and brings in a few corrective measures, it will not reverse the situation overnight. A couple of press releases came into my office today about some limited corrective measures which will be taken with regard to the energy policy. However, I think it is too little too late.
The article goes on to speak about one of the multinationals. They hire people and they spend money regardless of what the government thinks of them. The article goes on to read:
Gulf cuts budget. Gulf Canada Ltd. plans to cut its budget 15 per cent or $900 million during the next five years as a result of the budget and tax program.
You cannot reverse that overnight. There is no such thing as a reversal after something like that goes into effect.
The article goes on to read:
Earlier, Gulf Canada had planned a 1981 budget of about $1 billion, its first billion dollar budget.
All this is shot down with this ridiculous socialist policy. As I pointed out the other day, the only reason for doing this is that they thought they would capitalize on the Canadian people's feelings about oil companies. They thought they would nationalize them and harass them. It is a ridiculous, irresponsible argument and it will backfire on them. We are hearing threats from the Prime Minister who talks about an election. Well, 1 hope that that election comes about fairly shortly. I would love to fight a campaign on this ridiculous energy policy which is being presented.

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The article goes on to read:
But with an anticipated 30 per cent reduction in cash flow because of the federal action, Gulf Canada president John L. Stoik, said the firm had to reduce its spending plans. "We simply won't have the capacity to do any more," he said.
What is the alternative to all this? We will have Canada Works. We are on a treadmill. There is no way Canada Works can make up for the loss of investment money and all the jobs which will be lost as a result of this ridiculous policy. Here is another company, it is a Canadian company but that is all right. The Liberals are against Canadian companies also. The article reads:
Hudson's Bay slashes budget. Hudson's Bay Oil and Gas Ltd. cuts its 1981 Canadian exploration budget by more than 45 per cent to $203 million from a planned $378 million.
There will be devastating effects from such large cuts and thousands of jobs will go down the drain. Why is the government doing it? The minister who is here tonight said he will answer at the end. I hope he will have a surprise for us. I do not know what he is waiting for because the longer he leaves it, the worse it will get. This is no time to be trying to implement ridiculous socialist policies or playing games with the Canadian industry. Let him forget about that multinational business, let him think about Canadian companies. Let him forget about the multinational nonsense, it has been bled to death.
I have here a recent article from The Globe and Mail entitled "As the rigs roll south". It reads:
United States President Ronald Reagan has done what the Canadian government has failed to do. He has abolished the remaining controls on domestic oil prices, a job already begun by former president Jimmy Carter.
"Restrictive price controls," said Mr. Reagan, "have held U.S. oil production below its potential,
We cannot have oil production below its potential. We cannot remain at the mercy of the multinationals, like the Liberal party has, Mr. Chairman. Never mind about the multinationals, let us start developing here. Never mind chasing the rigs south.
The article goes on to read:
Federal energy minister Marc Lalonde has scoffed at the idea of petroleum capital and equipment moving from Canada to the United States, has argued that oil drilling rigs are still operating in record numbers in Canada. He should have read a letter from an oil driller which The Globe and Mail carried recently.
I heard the minister's comment the other day about the oil rigs, that there are a lot of them still here. But what he did not mention was that when their contracts run out, they will go south. They will not hang around here to be harassed by the government.
The article goes on to read:
F. J. Garnett, president of Garnett Drilling Ltd., in Calgary-
This is a Canadian firm, it is not a multinational or some oil baron.
-explained the situation. November through March is normally the busiest drilling period in the oil and gas industry. Oil drillers are fulfilling contracts from oil companies accepted before Ottawa announced its National Energy Program-
This points out the dishonesty of the minister. Did he give that kind of an answer in the House? No, he certainly did not.
He said that the oil rigs are all staying here, but he did not mention that they will all be leaving when their contracts run out.


Denis Éthier: I regret having to interrupt the hon. member, but I must advise him that his time has expired.


William Henry (Bill) Domm: Mr. Chairman, in the two or three remaining minutes tonight, I should like to respond-although 1 am very disappointed that the hon. member for Hamilton Mountain has left the House-to some of the points he made. In his remarks he referred to the fact that there was a hairdresser in his riding of Hamilton Mountain who was finding a great deal of difficulty in paying his taxes on a $6,000 income. Of course,
1 fully sympathize with that problem, but I hope members in the House realize exactly what the hon. member for Hamilton Mountain was suggesting should be the answer to the situation of an entrepreneur in Hamilton who is finding difficulties in making a living. The bottom line answer of the hon. member for Hamilton Mountain is: can we not be reasonable and take money from the very rich foreign multinational businesses? My only response to him, some members of my family having had experience in the hairdressing business since I have an entrepreneur son who owns more than one hairdressing establishment, is that if we had a government today which gave serious consideration to the plight of small businesses, we would be creating a climate, an atmosphere and a government policy which would allow free enterprise to function more effectively in the marketplace. My answer to the problem of the entrepreneur would be re-establishment of a government policy which would provide incentives to the business community, which would stimulate growth in the business sector, thus enabling the hairdressing establishment to which the hon. member for Hamilton Mountain referred to function economically and efficiently in today's conditions. However, we have here a government which would sooner move this country, with the help of the NDP, to a form of socialism. In reality, socialism is a form of communism. It can be summed up in a single sentence: the abolition of private property. Just the other night on national television the President of the United States said, "Call it communism, call it socialism, call it what you will, it is taking property from the people".
It is disregard for the right of ownership, the free enterprise system, motivated by the Liberal Party and supported by the New Democratic Party, to a point where we have in Canada today a disincentive to be in business. I see hon. members opposite smiling, but that is what we have, Mr. Chairman, a disincentive in the free enterprise market today to stay in business and function, thanks to the present Liberal government.
Progress reported.
February 2, 1981



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. John Bosley (Don Valley West):: Mr. Speaker, I rise tonight during the late show proceedings to refer to a question and answer which are reported in Hansard on December 5, 1980 at page 5403. My question to the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) was as follows:
I am wondering if the minister is finally ready to recognize that it is his policy of increasing the federal share of the gross national product over the next two years and financing that increase through increased borrowings that drives up the expectations of inflation and interest rates-
The minister's answer was as follows:
Adjournment Debate
Madam Speaker, the hon. member's question was based upon an assertion that we were increasing our share of the gross national product.. . That, of course, is not true. If the hon. member looks at the forecasts and projections, he will find that over the period of the projection until the end of 1983-84 the share of the government in the economy will be precisely the same size as it has been in the past year.
I took the Minister of Finance seriously. On the chance I was wrong, I did as the minister suggested and went to the record. There is only one record of the government's intentions with regard to its share of the gross national product. Unfortunately that is not found in Hansard but in the appendices to the budget papers which are now referred to as Sessional Paper No. 321-1/306A referred to in No. 82 of Votes and Proceedings of October 28, 1980.
With your indulgence, Mr. Speaker, I will quote some of the numbers found therein. Rather than quote them all I would appreciate if table 1.3, total outlays, could be printed in Hansard, otherwise I will be force to read all of the numbers. Does that meet with your indulgence, Mr. Speaker?


The Acting Speaker (Mr. Blaker):: Agreed.
[Editor's note: Table referred to above is as follows;]


TABLE 1.3 TOTAL OUTLAYS
[Stage Direction]
1979-80	1980-81	1981-82 ($ millions)	1982-83	1983-84Budgetary expenditures	51,534	59,350	66,640	73.725	81,215(per cent change)	(8.6)	(15.2)	(12.3)	(10.6)	(10.2)(per cent of GNP)	(19.8)	(20.9)	(21.2)	(20.5)	(20.1)Loans, investments and advances	1.428	600	985	1,000	1.060(per cent change)	(29.6)	(58.0)	(64.2)	(L5)	(6.0)Total outlays	52,962	59.950	67,625	74,725	82,275(per cent change)	(9.1)	(13.2)	(12.8)	(10.5)	(10.1)(per cent of GNP)	(20.3)	(21.1)	(21.5)	(20.8)	(20.3)Public debt charges	8,524	10,400	12,350	14.375	16,200(per cent change)	(20.8)	(22.0)	(18.8)	(16.4)	(12.7)(per cent of GNP)	(3.3)	(3.7)	(3.9)	(4.0)	(4.0)Total outlays excluding public debt charges	44,438	49.550	55,275	60.350	66,075(per cent change)	(7.1)	(11.5)	(11.6)	(9.2)	(9.5)(per cent of GNP)	(17.1)	(17.5)	(17.5)	(16.8)	(16.3)Nominal GNP"	$ billions	260.3	283.5	315.0	359.4	404.7(per cent change)	(13.3)	(8.9)	(11.1)	(14.1)	(12.6)
"GNP for calendar year ending three months before the end of the corresponding fiscal year.
John William Bosley: Mr. Speaker, the chart shows the following figures particularly: total outlays, and under the category total outlays, per cent of GNP from 1979-80 through to 1983-84. Those figures shown as per cent of GNP for total outlays are 20.3 per cent. 21.1 per cent, 21.5 per cent, 20.8 per cent and 20.3 per cent. I refer again to what the minister said:
If the hon. member looks at the forecasts and projections, he will find that over the period of the projection until the end of 1983-84 the share of the government... will be precisely the same size-
It is true that if one reads just that table, that is the last year of the projections, the share projected will be the same as last
year, but it is not true to suggest that over the period it will be the same. That is the first point.


Mr. Evans:: Yes, it absolutely is.


John William Bosley: I refer hon. members to the table because it is clear.
There is a second point to be made which concerns the way in which the government conducts its bookkeeping. The second table to be included is table 4.1 of the same document, the

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fiscal projections-national accounts and public accounts [Editor's note: Table referred to above is as follows:] comparison.


TABLE 4.1 FISCAL PROJECTIONS-NATIONAL ACCOUNTS AND PUBLIC ACCOUNTS COMPARISON
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Revenues
Public Accounts- budgetary revenues	40,159
(per cent change)	(14.0)
National Accounts -total revenues	45.187
(per cent change)	(14.3)
Expenditures
Public Accounts-total outlays	52,962
(per cent change)	(9.1)
National Accounts-total expenditures	54,412
(per cent change)	(10.3)
Net position
Public Accounts-financial requirements	10.445
National Accounts- balance	9,225
John William Bosley: The government has now embarked upon a new process. That process is to enter in net figures. It has been done for some time with respect to minor items. It is now proposed to be added under the petroleum compensation account. The effect is that the government will no longer be showing its true expenditures and true revenues but only showing net figures. If one looks at Table 4.1 one will find the actual expenditures of the government will not be the same as what the public accounts figures show, but $2 billion more in 1979-80. They are projected to be nearly $9 billion more than the public accounts projections in 1983-84.
If one takes those numbers, which are the true spending figures of the government, as a percentage of GNP, one will find that the percentage rises from 20.9 per cent to 22.3 per cent of the GNP in the last year, and the rate is higher in every other year. I rise tonight to say that I am partly worried by the attempt of the Minister of Finance, but I presume that because he does not know his figures, he is not purposely misleading the House. I am more worried by the fact that the government is committed to the never-ending policy of taking more and more out of the economy of Canada, thereby leaving less and less for other people with which to work. As one who has had municipal experience with projections three and four years hence, I know that those projections will be wrong. For instance, in the first table to which I referred, the GNP is projected to rise by 14.1 per cent and by 12.6 per cent. I suggest that that projection is quite optimistic.
What is wrong is not that the government is pretending that it will not increase its share of the GNP, but by actually increasing its share, the government will make it more difficult for Canadians to create jobs. The Minister of Finance in describing his financial objectives refers to the policy of gradualism. Although it is not clear in the minister's statements, it is quite clear from the tables that the minister's policy is one of
1980-81	1981-82 ($ millions)	1982-83	1983-8445.200	52,935	61,600	69.420(12.6)	(17.1)	(16.4)	(12.7)51,630	63,590	74.105	84,125(14.3)	(23.2)	(16.5)	(13.5)59,950	67,625	74.725	82.275(13.2)	(12.8)	(10.5)	<10.1)63.550	73,650	82.600	91,625(16.8)	(15.9)	(12.2)	(10.9)12,155	10.980	8.415	-7,15511.920	10,060	8,495	-7,500
gradualism-to gradually destroy this economy and to gradually put everybody in Canada out of work.


John Leslie Evans: Mr. Speaker, in listening to what the hon. member said, I find it very difficult to find anything in his last statements which I would consider to be of parliamentary value. Certainly, any hon. member who would accuse another hon. member-in fact a minister of the Crown-of intentionally destroying the economy of the country must be in great disrepute in his own mind for even thinking such a thing. It is absolutely asinine and it is simply not true. The hon. member must admit that he has overstated his case by a very long degree.
The fact is that according to the budget papers in 1979-80, federal expenditures will be 20.3 per cent of the gross national product and for the fiscal year 1983-84 federal expenditures will be 20.3 per cent of the gross national product. Any elementary arithmetic will indicate that the growth rate necessary to get from 20.3 per cent of the gross national product to 20.3 per cent of the gross national product is precisely the growth rate of the gross national product. It does not take a genius to figure that out.
If the hon. member is implying that the federal government will generate inflationary expectations by increasing the deficit, financial requirements and expenditures in that way, then how does he explain the figures shown in the budget which indicate, for example, that the financial requirements will decline from SI0.4 billion in 1979-1980 to $7.2 billion in 1983-1984. How does the hon. member explain the deficit figures which would see a reduction in the deficit from $11.4 billion in 1979-1980 to a figure of somewhat less in the fiscal year 1983-1984.
The budget papers speak for themselves. The growth in government expenditures are clearly there for all to see, the deficit reduction figures are clearly there for all to see, and the financial requirements are clearly there for all to see. Indeed,
February 2, 1981

the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) is following a policy of gradualism. 1 believe it is the right policy. Hon. members who think about the issues and understand the implications of the alternatives certainly support his policy.


HEALTH CARE-USE OF PRE-NATAL SCREENING KITS
William Alexander (Bill) Blaikie: Mr. Speaker, on November 18, 1980, I asked the Minister of National Health and Welfare (Miss Begin) what steps her department was taking with respect to the sale and promotion of certain pre-natal screening kits, mainly, the Alpha-fetoprotein kits which are designed to detect the neurological disease called spinal bifida.
My concern arose out of the fact that the manufacturers of these kits were then beginning a hard promotion campaign with doctors and that there was and is a significant uncertainty about the accuracy of the kits. The minister responded in the House by saying that the problem was "misuse" of the kits "more than anything else" and that she had written to provincial health ministers warning them of the dangers of misuse.
This response is inadequate in itself in so far as the misuse as such is not the only problem. This glosses over the fact that the kits themselves and their questionable accuracy is also at issue. 1 am glad that to some extent the minister has gone beyond her answer on that point in the House and has forbidden the sale of these kits and has restricted their use to research and investigative purposes.
Nevertheless, the minister's response at that time and in a subsequent letter to me is inadequate in a larger sense, because it is another example of the way in which the Canadian testing and approval system for new medical devices is totally unacceptable and is desperately in need of improvement.
The department contends that the onus is on the manufacturer to prove the safety and efficiency of medical devices. That sounds good except that the manufacturer must only do so if requested by the department. The department usually asks after there has been controversy and the product has already been widely distributed, marketed and used by many Canadians. This is not the kind of pre-market testing that Canadians have a right to expect from the government; in fact, it takes place more often in the United States than it does in Canada. What we have in Canada is a kind of post-market system of testing which uses Canadian people as guinea pigs.
1 submit that we must no longer be content, and certainly many of us have never been content, although the government seems to have been for some time now, with a system that puts the onus on the Canadian people to get sick or die. It puts the onus on them until the medical device is proven unsafe.
The whole concept of the burden of proof in our society with respect to medical devices, with respect to new drugs, with respect to environmental questions of pollution, occupational health and safety, environmental health-the whole notion of
Adjournment Debate
the burden of proof must be transformed from that of putting the onus for proof on the victim to putting the onus for proof on the promoter of a particular product in the marketplace. Long-term tests of a particular product, for instance, must be done only with the informed consent of the people who participate in them. That is not an impractical proposal, Mr. Speaker. Officials of the department claim that people like me who complain about this are being ridiculous; that there are so many devices on the market that the department could hardly be expected to test them all.
The fact remains that only a very few of these devices, which fall into special categories, are tested at all. The Department of National Health and Welfare could find it within its budget, if it were motivated by a concern for the health and welfare of Canadian people, to increase the number of devices tested in this pre-market way that I have suggested and, as 1 requested in committee on one occasion, the department should do more to articulate the notion of burden of proof which would remove it from the Canadian consumer.
Finally, in the course of my work as NDP health critic, I have complained in this House on a number of occasions about the lack of adequate testing of certain products on the market which are related to health care. More often than not in my experience to this point, I have found that those products which eventually become a source of controversy and about which a great deal of concern develops, are products related to the health and welfare of Canadian women.
There are several things that I have had occasion to bring to the attention of the department. For instance, the question of toxic shock syndrome, because that sort of thing is not being researched. According to the department it was not a priority. Last year the contraceptive drug depo-provera was in question and as was the drug bendectin, a drug used by women. The list of things goes on and on about which there is a great deal of uncertainty in the minds of Canadian people. We seem to have no policy in which we can put some confidence.
Trying to get beyond the game of simply responding to questions that I raised in the House, I want to take this opportunity in the time left to me to urge upon the Parliamentary Secretary to the Minister of National Health and Welfare (Mr. Frith), and through him to the ministry of health, that it is about time the Canadian government started to take these kinds of problems seriously. It should stop the system by which the Canadian people themselves are bearing the burden of inadequate pre-market policies employed by the Ministry of National Health and Welfare.


Mr. Doug Frith (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, there are two specific points which the hon. member has raised. One deals with some remarks he made toward the end of his comments which revolve around the use of drugs and how drugs marketed in Canada come to be allowed on the market.

February 2, 1981
Adjournment Debate
The record in Canada speaks for itself with respect to the safety record of the department concerning those drugs which are allowed on the market.
The hon. member's second point concerns medical devices. 1 can advise the hon. member that the minister instructed departmental officials in the fall of 1980, during the controversy over the toxic shock syndrome issue, to put more emphasis on the area of how medical devices are marketed in Canada.
When the issue was originally raised about the AFP test, 1 think the minister correctly pointed out in the House that her recommendation was that this was only one of the diagnostic choices available to physicians in this area of neuro-tube defects. The minister did point out how under specific conditions the test should be used. She further pointed out in the House at that time that she had instructed her provincial counterparts in a letter about the limitations of the use of the AFP test. She also suggested that competent AFP testing facilities should be developed under provincial jurisdiction.
With respect to the AFP tests, the minister also sent out a medical alert to physicians outlining the conditions by which AFP could be used as a diagnostic tool. She also instructed the department to come up with what we call a standard serum. In other words, the test itself could be compared to a purified
sample, which is available here in Ottawa, and provided to any of those designated testing centres.
However, the test itself has been banned in terms of its sale by the eight manufacturers on the kit. At present, they are only being used for research and investigative work. The manufacturers as well have instructed physicians about the proper use of the AFP kit. I am confident, with respect to AFP, that it is basically under control.
I want to emphasize a point I made earlier. When it comes to a device which is allowed on the market under the medical devices regulations, the minister instructed her department to put more emphasis on those products and the way in which they are marketed in Canada. Quite frankly, and I say this sincerely, knowing the pharmaceutical industry to the extent that 1 do, I think the department's record with respect to drugs allowed and marketed in the Canadian drug field is an excellent one. I would take some exception to what the hon. member says are some deficiencies when it comes to the marketing of drugs in this country. When it comes to drugs being allowed on the market we probably have the safest record of the western industrialized world.


The Acting Speaker (Mr. Blaker):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock.


[Stage Direction]
The House adjourned at 10.20 p.m.
[Stage Direction]
Tuesday, February 3, 1981